observers appear to assume Huawei is a naturally strong competitor that gained its dominant position through good business strategy. Congress is already taking steps to support the shift toward a more diverse and interoperable equipment market, the United States has not yet taken on China’s market-distorting industrial policies. firms will have new opportunities to enter the market, and it will be much harder for Beijing to suppress competition and maintain Huawei’s dominant position. If the mobile network equipment market becomes truly interoperable, it will no longer be an oligopoly. Mobile telecom operators should be able to do the same, and pressure is growing to move the market in this direction.
For example, in the personal computing market, buyers previously had to buy their desktop, monitor, and printer from the same vendor, but today they can mix and match. This market is overdue for a shift to interoperability. Network equipment is a single-vendor market: When an operator purchases equipment from one vendor, it cannot mix in technology from other companies. The shift from fourth- to fifth-generation mobile telecommunications creates an opportunity for the United States not only to tackle China’s market-distorting industrial policies but also to help U.S. If the United States can successfully counter those policies to make this market more competitive, that will make the security side of the 5G challenge much easier to solve. Thus far, the United States has largely overlooked the market-distorting industrial policies that Beijing uses to make Huawei the global front-runner. But the cost associated with choosing an alternative vendor (Ericsson, Nokia, or Samsung) and forgoing the lucrative incentives Beijing offers to Huawei’s customers are immediate and measurable. Second, Beijing deploys powerful industrial policies to make Huawei equipment cheaper to deploy than the three alternatives.įor the telecom companies making network equipment purchases-and the national governments who regulate them-the security risks associated with Huawei equipment are theoretical and hard to quantify. First, the mobile network equipment market is an oligopoly with just four major vendors to choose from-none of which is a U.S. The Brazilian government expects to award spectrum for the provision of 5G technologies across the country in 2020, according to previous reports.The reasons are simple. Mourao had met Huawei chairman and CEO Ren Zhengfei on a trip to China the month before.īrazilian mobile operator TIM Participacoes had previously confirmed that it was using Huawei equipment to conduct 5G network tests in southern Brazil. Meanwhile, in June, Brazilian vice-president Hamilton Mourao said his government would not exclude Huawei from taking part in the deployment of 5G mobile telecoms network in the country. In the second quarter of this year, the telco reported a net loss of R$1.62 billion ($392 million) compared to R$766 million profit in the first quarter. In the past week, Telecom Italia and Telefonica Brasil both denied reports in the Brazilian media that they’re in talks to potentially acquire Oi.įounded in 1998 as Telemar, Brazil’s largest fixed-line operator Oi has been trying to revive its business since filing for bankruptcy protection in June 2016. 17 that it did not have any official information regarding the request. However, the country’s telecom regulatory agency Anatel said on Sept. Last week, Brazilian news site Suno Notícias reported that China Mobile has filed a request to be informed of all the conditions required to operate in the Brazilian market and eventually acquire Oi. With more than 20 years in Brazil, the company works with all major Brazilian operators, offering the best products and solutions to support the country’s digital transformation,” the Chinese vendor said in an emailed statement to RCR Wireless News.īrazilian newspaper O Globo reported on Saturday that Huawei Technologies has been exploring a partnership with China Mobile to potentially enter a dispute to acquire struggling Brazilian carrier Oi with the aim of boosting its footprint in Latin America’s largest market.Īccording to the report, both Huawei and China Mobile anticipate a significant growth in business once Brazil starts deploying its 5G network infrastructure and Oi’s 360,000 kilometers of fiber infrastructure is seen as an attractive asset in that scenario.
“Huawei has no plans or interest to acquire Oi or any other Brazilian carrier. Chinese vendor Huawei has denied press reports suggesting that it may partner with China Mobile in a bid to acquire Brazilian telecom operator Oi.