Those comments were “a bit preemptive,” said Carisa Nietsche, a researcher at the Center for New American Security, a Washington think tank.
But there is “the beginning of a radical change in Europe,” Nietsche said.
European countries and mobile phone operators are now concerned that Huawei may not be able to provide 5G infrastructure as promised given the “massive blow to your business” from the new US export controls, he said.
Huawei’s 5G business in ‘grave danger’
That would prove to be too true.
Without those chipsets, Huawei cannot build 5G base stations and other equipment, according to analysts at brokerage firm Jefferies.
“Based on the current direct export rule the United States put in, I really believe Huawei’s 5G equipment business is in grave danger,” Jefferies analyst Edison Lee said in a recent call with investors.
“If the law does not change, and if the tension between the United States and China does not decrease, then I think there is a great risk that Huawei will no longer be able to provide 5G equipment” early next year, he added.
When asked for comment for this story, Huawei spokeswoman Evita Cao said, “We continue to receive support from our customers,” without going into further detail.
The company He said in May that he “is categorically opposed” to the latest US sanction, calling the new rule “discriminatory.”
“It will have a serious impact on a large number of global industries” and will harm “collaboration within the global semiconductor industry,” Huawei said in a statement. “We hope that our business will inevitably be affected,” he added.
That may already be happening in the UK.
“I am not a synophobe, I will not be carried away by sinophobia,” Johnson said Tuesday. But “I do want to see our critical national infrastructure adequately protected from hostile state vendors, so we must strike that balance.”
Huawei said earlier this year that it has won 91 5G commercial contracts, more than half (47) are in Europe, 27 are in Asia, and 17 are in other parts of the world.
Tensions in China
Critics also say that Beijing could force Huawei to spy on other nations. Huawei says that never happened and if it did, the company would reject such orders.
However, despite asserting its independence from Beijing, Huawei has been embroiled in clashes between China and the United States, and to an increasing degree, the European Union and countries like India, increasingly cautious with China.
Now there are “excellent signals” from Germany and the UK “that they will move to exclude or at least take Huawei out of the core [5G] Nietsche said. Germany, for example, is analyzing Huawei’s data streams to see if the company is violating European law, he said.
Meanwhile, India had been coming and going on whether to include Huawei equipment in the country’s 5G network, said Chaitanya Giri, an analyst at India Gateway House’s foreign policy think tank. Huawei received the green light to participate in 5G testing at the end of last year.
But tensions between New Delhi and Beijing have increased dramatically in recent weeks after at least 20 Indian soldiers were killed in border clashes with Chinese troops stationed in the Himalayas. China has also been singled out in India for the coronavirus pandemic, according to Giri.
Huawei can now find itself caught up in mounting tensions, according to Giri. Public sentiment has now “been consolidated, that we are not going to use any of the Chinese teams,” he said.
What Europe and India share, according to Giri, is a growing sense of unease after years of substantial investment by China.
“The big democracies right now are singing in a choir,” he said. “They understand what is at stake.”
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