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After Effect of Phase One Deal: Telenor Chooses Ericsson over Huawei 5G
Business, Markets

After Effect of Phase One Deal: Telenor Chooses Ericsson over Huawei 5G 

Just after the agreement of phase one trade deal was formalised between the US and China, things seem to be shifting in favour of Huawei. But is it really the case?

Norwegian telecommunications company, Telenor, announced plans to choose Ericsson for supplying a part of its new 5G network. The move would end the decade long collaboration between Telenor and Huawei 5G network. The decision came right after the phase one deal’s announcement, possibly as a means to be in favour of the US government. The US government has banned most companies to maintain any business relations with Huawei Technologies due to cyber espionage.

Sources claim that Telenor would eventually remove Huawei equipment as it plans to upgrade radio gear for the next generation of mobile networks. CEO Sigve Brekke said that the selection process for the best 5g service provider was done after an “extensive security evaluation”, besides considering factors like technical quality, commercial terms and innovation abilities.

He added, “Based on the comprehensive and holistic evaluation, we have decided to introduce a new partner for this important technology shift in Norway.”

In an announcement made yesterday, Telenor affirmed plans to continue associations with Huawei 5G services before it transitions to the new network over the coming four to five years. Ericsson has not responded to the comments so far and Huawei declined to comment.

Contrary to the withdrawal initiated by Telenor, German carrier Telefonica Deutschland plans to take up Huawei 5G and Finland’s Nokia to together supply equipment for the less sensitive 5G radio network. The main reason why Telefonica Deutschland prefers Huawei 5G, despite the security guidelines by the US government, is that the Chinese firm conforms to the German legal provisions.

Planning to complete the expansion by 2021, Telefonica Deutschland has included Berlin, Hamburg, Munich, Cologne and Frankfurt in its future prospects. As per the company, if things go as planned, by the end of 2022, 30 cities will be serving Telefonica 5G.

Reverting to the speculations of Germany excluding Huawei Technologies as a supplier of 5G wireless equipment, China’s ambassador has threatened the country, quoting millions of vehicles that German carmakers sell in China.

Under the governing coalition of Chancellor Angela Merkel, lawmakers have become resistant to Huawei. They have challenged her policy with a Bill to impose a broad ban on “untrustworthy” 5G vendors. Speaking at a Handelsblatt event on December 14, Ambassador Wu Ken said, “If Germany were to take a decision that leads to Huawei’s exclusion from the German market, there will be consequences.”

Even though the impact of phase one trade deal on the future of Huawei Technologies remains precarious, no direct impact is in sight. All the allegations laid on Huawei, in terms of security have been denied, the real concern still remains. For a successful smartphone business in its 2020 product launches, it is important that the Huawei 5G business runs good and helps in overcoming the losses witnessed in recent time be gone.

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