Huawei warns the FCC that the Chinese trade wars could slow down 5G adoption in the U.S.
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Huawei is one of the Chinese smartphone OEMs that is most affected by Trump's trade bans. The company was planning to enter the US market this year, but, the U.S. government is currently considering key Chinese OEMs a threat to national security, as all equipment manufactured in China could be riddled with backdoors that facilitate espionage.
Now that the 5G telecommunication infrastructures are being tested in several regions across the globe, it looks like the U.S. is ready to switch from 4G LTE to 5G. However, Huawei now argues that without the Chinese hardware (i.e. 5G modems), the adoption rate for the upgraded infrastructure would be considerably slower.
The US Federal Communications Commission (FCC) has received a new report, in which Huawei is explaining that 60% of its revenues is generated outside of China, as it provides communication devices for more than 500 operators in 170 countries, including a few smaller U.S. carriers. If the U.S. government continues to block Huawei and other Chinese manufacturers out of the U.S., the MSRP for new devices will constantly rise and consumers would be affected as well. In other words, U.S. may have a functional 5G network but there would not be too many users that could afford to use it.
This would also apply to Australia, a country that has recently banned Huawei for similar concerns. UK, on the other hand, considers Huawei a vital asset for the proliferation of the new 5G networks.
According to Huawei’s FCC filing, the Chinese company “urged the Commission to consider the substantial costs of the [proposals], in particular its impact on carriers in rural and remote areas, many of whom are attracted to Huawei as a result of Huawei’s commitment to affordable, quality products and attentive customer service. Furthermore, Huawei’s lack of presence in the US would raise prices, harm competition, hinder innovation, and ultimately delay 5G deployment.”
This delicate problem might benefit Qualcomm and Samsung, two companies that have already announced 5G modems, but do not rely on Chinese manufacturing.