NATIONS ACROSS THE ATLANTIC & EUROPE ARE BARRING HUAWEI FROM PARTICIPATING IN THE NATIONAL 5G NETWORK. WHAT'S GOING ON & WHY? HERE'S WHAT.
Huawei is a mammoth organisation in the telecommunications sector. Apart from making top notch phones & laptops, it also manufactures equipment used in the telecom sector by internet providers. But recently it has been barred from participating in setting up of 5G network in countries like
Australia
Japan
USA
UK
France
First Lets take a look at
HOW BIG IS HUAWEI
In case of smartphones, Huawei was a major player in the global market (prior to COVID) and it still is in China accounting for more than 40% of market share.
If we analyse the graph below,we can judge that Asia & Europe have been the major growth region for this company in the past decade. On the other hand, its consumer business has grown rapidly taking a larger share of revenue. The continued steady growth in telecom segment established its position as the market leader.
Huawei is also the leader in development of 5G. It has filed the most patents worldwide as of 2019 (related to 5G) and it also has developed the latest tech in its R&D lab to initiate 5G network.
WHY IS HUAWEI BEING BANNED?
First and foremost, its important to understand that the telecom part of business is banned & not the smartphone one. The efforts to discontinue Huawei from 5G network were initiated & propelled forward by the American Government. The main reason cited by them is "security risk".
The main concern is the National Security Law passed by the Chinese Government which forces companies to cede user information to the govt. As per the CNBC, this law also applies to Huawei & the 5G network in foreign countries.
Huawei has also been accused of stealing tech secrets from its American competition.
The Trump administration has also forced American tech giants like Google, Intel amd chip maker TSMC to stop providing support services. This means Huawei phones will have no TSMC chips and google apps, a major blow to its medium term prospects.
WHAT'S NEXT
Huawei can still build 5G networks in Asia, Africa and Eastern Europe where no bans have been forthcoming so far. Even India has allowed it to propose a tender, for now.
The American apps and hardware can be replaced easily by Chinese counterparts. like Alibaba, TSMC (Chip company) and Huawei's own OS.
Huawei also has access to the world's largest market, China. The domestic demand for such products will not dwindle in the foreseeable future.
Nations who do not want to take sides in US-China rivalry can take a neutral stance by allowing Huawei to build consumer 5G network and keeping it away from critical & sensitive core infrastructure of the telecom network. After all, Huawei is the cheapest in the telecom sector in terms of consumer, construction as well as maintenance. Its speed is also the best amongst its competitors.
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AU REVOIR!
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