Sections

ideals
Business Essentials for Professionals

Talks Between US Firms Huawei For Licensing Of 5G Tech: Reuters


10/19/2019


Talks Between US Firms Huawei For Licensing Of 5G Tech: Reuters
A report published by the news agency Reuters quoting a Huawei executive said that the Chinese telecom equipment making company Huawei, which was been blacklisted by the United States in May this year, is in talks with a number of American telecom companies with respect to licensing of its 5G network technology. The executive however also said that the talks were in the initial phase.
 
There is a growing interest for both a long-term deal or a one-off transfer of Huawei’s technology among a number of American companies, said Vincent Pang, senior vice president and board director at the company. He however did not disclose the name of any company.
 
“There are some companies talking to us, but it would take a long journey to really finalize everything,” Pang explained on a visit to Washington this week. “They have shown interest,” he added, saying conversations are only a couple of weeks old and not at a detailed level yet.
 
Huawei was banned from participating in the construction of 5G telecom networks in the US last year following concern within the US government that the equipment supplied by the Chinese company could be used to spy upon western countries by Chinese agencies. The US has also been pressurizing its allies to prevent Huawie from bidding for 5G netowkrs in their countries as well. Huawei has repeatedly denied the allegations made against it.
 
There are no companies in the US that can [provide 5G services while the European companies Ericsson and Nokia are more expensive than the services offered by Huawei.
 
The US Commerce Department placed Huawei in its so called ‘list of entities’ which essentially prevented all American companies from doing business with the Chinese firm without special license from the government. It meant that Huawei could not sell anything to or buy anything from American companies.
 
Criminal charges against the company have also been brought by Washington alleging that Huawei had been involved in bank fraud, had breached the US sanctions against Iran, and had was involved in theft of trade secrets of American companies. These allegations have been denied in court by Huawei.
 
The company is expected to be effectively banned from the US telecoms supply chain after the US Commerce Department came out with a set of new rules earlier this month.
 
The CEO and founder of Huawie, Ren Zhengfei, was the first to float the idea of a one-off fee against the company allowing the use of its 5G related patent. This was said by Ren Zhengfei last month during interviews with the New York Times and the Economist.
 
Last month, Reuters quoted a US State Department official expressing skepticism about the offer from Ren. “It’s just not realistic that carriers would take on this equipment and then manage all of the software and hardware themselves,” the person said. “If there are software bugs that are built in to the initial software, there would be no way to necessarily tell that those are there and they could be activated at any point, even if the software code is turned over to the mobile operators,” the official added.
 
Pang did not say anything about the possibility of a deal being signed. He however also warned that the companies accessing the 5G technology from Huawie will find it very costly because of the investments needed to continue with the research and development work for continuous improvement of the platform.
 
(Source:www.reuters.com)