Huawei wants to sell its 5G tech to rivals – report

The latest bid by Chinese kit vendor Huawei to adapt to US sanctions could involve licensing its 5G technology to whoever is willing to pay.

The remarkable claim was made by CEO Ren Zhengfei (pictured) in a recent interview with The Economist. “For a one-time fee, a transaction would give the buyer perpetual access to Huawei’s existing 5G patents, licences, code, technical blueprints and production know-how,” declared the piece. It also noted that the acquirer would be free to muck about with the source code, thus removing the risk of there being nefarious, sneaky bits of spyware or whatever hidden in there.

A technology company’s intellectual property is its crown jewels and under normal circumstances offering it up to competitors would be the very last thing it would do. But these are exceptional times for Huawei and it’s having to consider ever more novel ways of adapting to a time in which many countries around the world are blocking its presence in their 5G networks.

The stated aim for this move is apparently to create a viable non-Chinese competitor to Huawei in order to take the geopolitical heat off it. Ericsson and Nokia would be entitled to take exception to the inference there, but at the same time would surely be tempted to get hold of some of that choice IP.

On further reflection this doesn’t really add up. Ericsson, Nokia and to a lesser extent ZTE and Samsung all have competitive networking offerings, so this feels more like a dig at them than a genuine attempt to move things forward. It also feels like a bit of a public relations gimmick, so Ren can say he’s trying everything to resolve the current situation and the US needs to meet him half way.

This move could also be a further attempt to reassure the US that there are no security concerns with its software by putting it in the hands of competitors that have every incentive to uncover any cyber-naughtiness there may be therein. But how can anyone be sure that the IP Huawei licenses to third parties is identical to that contained within its own kit?

Ren deserves credit for continuing to engage with the western media and for at least appearing to try to come up with solutions to the current impasse. As we saw in the matter of the confiscated Huawei gear, the US isn’t always acting in good faith in this case, but it seems unlikely that this latest initiative will do much to ease its concerns about Huawei’s presence in the 5G networks of itself and its allies.

US gives Huawei back some gear it nicked two years ago

In September 2017 US authorities confiscated a bunch of Huawei kit on its way from California to China and has only just returned it.

The only account we have of this is from Huawei, but that’s at least in part because the US has been very reticent about explaining many of its actions regarding Huawei. The servers and networking gear had been in a California lab to undergo commercial testing and certification. When it was in the process of being returned the US Commerce Department seized it, citing unidentified export violation concerns.

By June of this year Huawei decided to take legal action to get its property back and, as if by magic, the US decided to return it, once more without explanation, according to Huawei. “Huawei views the decision to return the technology as a tacit admission that the seizure was unlawful and arbitrary,” said Huawei in its announcement, which also revealed that the lawsuit has been dropped as a consequence.

“Arbitrary and unlawful government actions like this – detaining property without cause or explanation – should serve as a cautionary tale for all companies doing normal business in the United States, and should be subject to legal constraints,” said Dr. Song Liuping, Huawei’s Chief Legal Officer.

Presumably the US wanted to inspect the gear to see if it could find any evidence of IP theft, Chinese spy gear, or whatever. If so then it should have followed that same due process it would have applied to US companies, such as just cause, legal representation, etc. Every time the US abandons due process while at the same time accusing Huawei of illegality it undermines its own position.

Huawei reportedly reckons it has an Android ban workaround

At a recent trade show a Huawei exec indicated that there may be a way to enable its future smartphones to access Android apps despite Google being banned from working with it.

The goss comes from Android Authority, which attended the launch of the Huawei P30 Pro at IFA in Germany. At the launch the head of Huawei’s consumer business group Richard Yu apparently told reporters he has a cunning plan to get around the catastrophic consequences of not longer having google support for Android.

While Android itself is open source and anyone is free to install their own take on it, the Play Store and Google apps such as Gmail. Maps, etc are all licensed from Google and can’t be installed on a phone without that license. If and when the US stops suspending the sanctions that come with Huawei being put on its entity list, Google will be barred from entering into further licensing agreements with Huawei.

An Android phones without Google apps and the Play Store is not worth having. There are already signs of Huawei having to adapt to that eventuality, with the P30 Pro featuring the EMUI 10 user interface that is ‘based’ on Android 10. The extent to which it deviates from Android 10 to the detriment is unclear.

In reference to the imminent launch of the flagship Mate 30 smartphone, Yu said Huawei is working on a way of letting users install Google apps on the non-official version of Android. He even went so far as to say that the process would be quite easy for users, without going into details. Even if that’s true, however, with there being so little to choose between flagship Android smartphones when it comes to hardware specs, there would still be little incentive for punters to accept any user experience compromise, so even this hope may be forlorn.

Microsoft President defends Huawei, calling Trump Un-American

Microsoft President Brad Smith has leapt to the defence of under-fire Chinese vendor Huawei, suggesting the US Government should table evidence if it wants to continue on this path.

In an interview with Bloomberg Businessweek, Smith has aired his views on the prolonged tensions between China and the US. In a similar position to some more considered regulators around the world, Smith has demanded the burden of proof to back-up serious accusation made by the White House.

“Oftentimes, what we get in response is, ‘Well, if you knew what we knew, you would agree with us.’ And our answer is, ‘great, show us what you know so we can decide for ourselves. That’s the way this country works,” Smith said.

Smith is of course 100% correct here. We completely understand some details will not be able to be released in their entirety to the general public, but certain individuals, organizations and agencies should be offered insight to evidence which the White House is hording. The burden of truth is not one which should be brushed aside, and President Trump has not earned the right to demand blind belief.

Fortunately, there are some across the world who elect to make responsible and considered decisions. We’re not talking about the Australians, the state which decided to blindly follow the orange light without asking any questions or demonstrating the ability of independent thought, but the Germans.

The fact that Huawei has not been banned from the German market tells us and the world that the White House has not deemed it pertinent to demonstrate proof of nefarious activities to one of its allies.

Last December, Germany’s Federal Office for Information Security (BSI) took a bold stance against the White House, demanded the US Government produce evidence to support the claims should it want the Germans to introduce its own ban. As there has been no action taken by the German Government or any of its agencies to date, it would be a fair assumption the US Government is yet to produce anything.

The Germans are not alone in ignoring the huffing and puffing from the Oval Office, though Smith joining the party is a notable development.

What is worth noting, is this is probably a commercially based decision, though that is not necessarily something Smith should be scalded for. Like most other US companies, Smith wants the opportunity for his firm to work with one of the technology industry’s fastest growing innovators.

Huawei is one of the world’s leading smartphone manufacturers, but it has also been making some promising moves in the PC and laptop segments also. With tetherless connectivity in laptops set to become a common trait over the next few years, this segment could witness a disruption. As Windows is installed on most PCs and laptops, Smith and Microsoft will win irrelevant as to which brand triumphs, but it will want to make sure it is working with every brand possible.

Microsoft will want to continue working with Huawei, as will many other companies. At least 130 applications have been submitted to the US Commerce Department seeking exemption from the ban to work with Huawei, though none have been approved thus far.

Soon enough, the US Government will have to present evidence to back up the claims. This administration seemingly believes it can bully its way through international relations, though if US companies start turning against US ‘foreign policy’ it creates a very uncomfortable situation.

Huawei hits back, claiming US is threatening its employees

Perhaps this is the first hint of a new media strategy from the under-fire vendor as Huawei suggests the US Government is encouraging threats and menace to turns its employees against it.

Although this is only a single act, it is a very different approach to how Huawei has been managing the drama through the last 12 months. This is maybe the position it has been forced into by White House aggression; it might have to start fighting fire with fire.

In a statement, Huawei has suggested the US Government has been “instructing law enforcement to threaten, menace, coerce, entice, and incite both current and former Huawei employees to turn against the company and work for them.”

In shining a light on the bullying tactics of the US Government, perhaps the executive team is looking for sympathy from friendlier nations or for someone to step-in and suggest the actions are not proper. The US Government certainly won’t be shifted from its current course through social embarrassment but calling attention to the strategy it might sour the relationship between the US and other nations around the world.

Aside from encouraging government agencies to act through ‘unscrupulous means’, Huawei is also suggesting the US is:

  • Unlawfully searching, detaining, and even arresting Huawei employees
  • Launching cyber-attacks against the firm
  • Coercing other companies to bring unsubstantiated accusations against the company
  • Attempting entrapment
  • Obstructing normal business activities and technical communications through intimidation, denying visas and detaining shipment

Although it isn’t entirely clear what the desired outcome of this statement actually is, it is a new approach. To date, Huawei has sat back and absorbed the abuse. Its messages have focused on proving its own innocence, as opposed to tackling its opponent. Perhaps this is about to change.

With this statement, Huawei is calling attention to the less attractive traits of the US. It might consider itself as the front-line of defence, the world police in some people’s eyes, however it can also be viewed as a bully. Not only would many deem this inappropriate, if some of the claims above prove to be true, the White House might well be acting illegally.

President Trump’s administration certainly does things differently from those who have previously inhabited the White House, though the jury is still out on what this actually means. Some like the fact Trump is shaking up politics, some suggest he is an embarrassment to a privileged position of responsibility, a shambolic disaster who stumbles from one inappropriate statement to the next calamitous action.

It does seem there is an element of the ‘straw which broke the camel’s back’ here.

This chapter of the on-going saga is focused on a patent dispute with Rui Pedro Oliveira which has now being going on for two years. Circling around the development of a camera design included in Huawei smartphones, the Department of Justice has launched an investigation as a result. Huawei believes Oliveira is taking advantage of the geopolitical climate and the US Government is jumping on another opportunity to swing the stick at the firm.

Perhaps this will be the beginning of a new media strategy, drawing the attention to the US’ ugly traits. This Presidential administration has certainly taken a more combative, bullying approach to international relations, though we suspect it will not be too bothered by the Huawei statements. That said, other governments might take notice and start getting irked by the continued campaign of hate and ‘unpresidential’ actions.

Poland signs agreement with US to shore up 5G security

The US and Poland signed an agreement on 5G security, effectively barring Chinese companies from participating in building 5G networks in one of the largest markets in central Europe.

The agreement was signed by Mateusz Morawiecki, the Polish Prime Minister, and Vice President Mike Pence during his visit to Warsaw in place of President Trump, who stayed behind to deal with the expected landing of Hurricane Dorian. The presidential visit was made to commemorate of the 80th anniversary of Hitler’s invasion of Poland.

The two parties of the agreement pledged to protect “these next generation communications networks from disruption or manipulation and ensuring the privacy and individual liberties of the citizens of the United States, Poland, and other countries is of vital importance.”

When it comes to supplier selection, the agreement says, “we believe that all countries must ensure that only trusted and reliable suppliers participate in our networks to protect them from unauthorised access or interference.” Though it does not name China or Huawei, the criteria listed for “rigorous evaluation” read almost tailor-made for this purpose.

Specifically, suppliers should be evaluated on: whether they are controlled by a foreign government and subject to independent judicial review; whether they have a transparent ownership structure; whether they have a track-record of ethical corporate behaviour; and whether they are “subject to a legal regime that enforces transparent corporate practices”.

Other US officials were more straight-forward. “We recognize 5G networks will only be as strong as their weakest link,” said Marc Short, Pence’s chief staff, in a statement quoted by Associated Press. “We must stand together to prevent the Chinese Communist Party from using subsidiaries like Huawei to gather intelligence while supporting China’s military and state security services – with our technology.”

Poland has been one of the more vocal European countries calling for a ban on Huawei, especially after a Huawei employee was arrested charged for spying. The country’s officials had called for a coordinated NATO-EU action. But with any EU-wide 5G security measures not expected to be in place by October and member states given another year to test the measures, Poland looked to the US for a faster solution. The two countries have strong cultural ties. “Nearly 10 million Americans trace their heritage to Poland”, according to Pence.

The Polish officials had conceded that they lack legal tools to ban Huawei from the country’s private sector. This agreement would deter such an interest from the privately-owned telecom companies.

The agreement would also be a significant step for the US to get Europe, including the UK, on board its battle with China and with Huawei. Pence called it “vital example for the rest of Europe on the broader question of 5G.”

Huawei claims 50 5G commercial contracts worldwide

At its Asia-Pacific Innovation Day Huawei announced it has now signed 50 commercial 5G contracts globally and shipped 200,000 5G modules.

Huawei loves to host its own commercial events, at which it can control the message and invite partners to come on stage and talk about how great it is to work with Huawei. This kind of event is more important than ever for the company now that it’s fighting a running PR battle with the US government and strives to convince everyone else not to abandon it.

While US allies such as Australia and Korea feel compelled to largely go along with whatever sanctions the US imposes on Huawei, the rest of the APAC region is crucial to its fortunes. Obviously China will always support it, but very populous countries such as India and Indonesia are of crucial strategic significance and have to obvious reason to pick a team in the US/China trade war.

Huawei positions these events as general telecoms get-togethers that it’s happy to host and pay for out of a desire to help everyone progress. It therefore keeps the more aggressive corporate propaganda under wraps most of the time and largely contents itself with nebulous aspirational pronouncements about the potential of technology and the importance of cooperation among the global telecoms community.

“5G is arriving at the right time,” said William Xu, Huawei Director of the Board and President of the Institute of Strategic Research. “More specifically, 5G can provide wide coverage, large bandwidth, and low latency on the basis of traditional connections. It can also provide slicing for different applications. This new feature makes it adaptable to a variety of complex industrial applications. With the advancement of 5G, there will be many 5G-enabled applications that will change the world. At the same time, 5G, AI, IoT and cloud are improving everyday life and nature, making the world a better place.”

Having said that, he was still keen to stress how well Huawei, specifically, is doing in this drive to make the world a better place. Those 50 (unspecified) deal wins compare with 42 Announced by Nokia in June, with 22 of them named, and 24 named 5G contracts published by Ericsson. So it seems to be broadly level-pegging between the three networking giants and, while Huawei doesn’t appear to have been crippled by the US hostility, it’s reasonable to speculate it would have a significant lead over its rivals under normal circumstances.

Huawei hasn’t given up on Australia as it plugs 6G smarts

Even though Australia blindly followed the US down the Huawei-accusation rabbit hole, the Chinese vendor hasn’t given up on the country, using the 6G carrot to tempt the Aussies back into the fray.

Speaking at the Emerging Innovation Summit in Melbourne, a Huawei executive suggested Australian decision-makers have been short-sighted in addressing cyber-security concerns.

“The current approach being taken towards cyber-security on 5G mobile networks solves absolutely nothing – and that will be exposed further in 6G,” said Huawei Australia Chief Technology and Cyber Security Officer David Soldani.

This is of course assuming Huawei is an innocent party, though as little (if any) concrete evidence to prove guilt has been presented to date, the fair position would be to maintain this assumption of innocence.

“Blocking companies from certain countries does nothing to make Australia any safer from cyber-security issues – in fact it just makes things worse because they are not addressing the real issues on cyber-security.”

This is a point which has been raised frequently but those who advocate the inclusion of Huawei in communications infrastructure moving forward. Banning a certain company or technology from networks does not tackle the issue. For some, the most sensible route forward would be that of risk mitigation, an approach Vodafone in the UK has been very vocal about.

“Huawei is already way ahead of our rivals on 6G research and we can see that the way in which we will be gathering and consuming data on those 6G networks means the cyber security risks will increase,” Soldani added.

Although it might encourage moans from some corners of the industry, 6G is becoming a very real and increasingly important facet of the connectivity mix. 5G is of course not a reality yet, but for the R&D engineers, the job is complete. Work has moved out of the research labs and into production; for these employees it is onto the next task; 6G.

This is another common message which has come out of the Huawei ranks over the last few months; it is critical to work with us, not ignore us. And many of those on the technology side would agree also.

The reason the prospect of a Huawei ban is such a divisive and persistent topic is relatively simple; Huawei produces excellent products. Not only are these products cheaper, while the field support offered to telco customers is largely unrivalled, the products are genuinely at the top of their field. There are large crowds who would suggest Huawei is market leader on in the radio and transmission segments.

“The communique from the Five Eyes was absolutely clear that countries need to ensure entire supply chains are trusted and reliable to protect our networks from unauthorized access or interference,” Soldani said.

“This means there is absolutely no point in simply banning companies from certain countries – it actually makes Australia less secure because it means we have to then increase our reliance on just one or two other vendors – neither of whom are having their equipment tested.”

This is another point which, once again, has been thrown around quite often by Huawei, but is also valid; no-one is 100% free of cybersecurity risk. By reducing the number of attack points for cyber-criminals, arguably it becomes more difficult to defend and the chances of a breach increase.

These are all perfectly valid points, but Huawei is trying to prove a negative here. Nothing which can be said or presented to the world would completely exonerate the firm of suspicion, especially with the US Government constantly hinting there is evidence of wrong-doing. The fact that no-one outside the White House or the Foreign Department has seen this evidence does appear to be irrelevant to some, though that is not to say it does not exist.

This issue is quite frankly becoming tiresome. Of course, governments around the world have a duty to ensure companies are acting responsibly through the sourcing and deployment of secure and resilient products, but the issue is become tedious to discuss week on week. Unfortunately, as the UK Government continues to kick the can down the road, the debate is likely to continue.

Although the UK is finding it difficult to maintain friendships with its peers inside and outside of the European Union, it is still an incredibly influential voice. The Supply Chain Review has attracted interest from numerous parties around the world, and the decision will be carefully scrutinised. It might be rubbing nations up the wrong way with Brexit, but its opinion still matters.

Some nations of course benefit from the on-going stand-still and some don’t. The UK doesn’t benefit as telcos are still no wiser whether supply chains will be in tatters and numerous other countries that rely on Huawei, Germany, Spain or Italy for example, are in the same boat. Australia is in a tricky position as banning Huawei limits the options which are out there. This present complications from a resilience and competition perspective.

The US appears to be one of the few nations which is not going to be impacted. Deployment might be a bit more expensive due to decreased competition, but the telcos have never had the opportunity to include Huawei in plans so there is no disruption from this on-going saga. The US might well be a lost cause, but it does appear Huawei believes it can charm Australia back on-side.

Huawei might not have given up on Australia, but as long as the White House is singing from this hymn sheet, it is likely to be nothing more than a Sisyphean task.

Sunrise claiming 80% (no joke) 5G population coverage already

It might be a small country, and its citizens might be concentrated in the cities, but Switzerland is driving forward with 5G like few other countries around the world.

Switzerland is not the biggest of markets, but it is demonstrating how competition can drive network deployment forward. Alongside market leader Swisscom suggesting it will have 90% population coverage by the end of 2019 for 5G, Sunrise is claiming it has already hit the 80% milestone.

With 262 cities and towns already covered in the 5G blanket, the Swiss consumers are getting treated to a connectivity euphoria few others can claim to match.

“At the start of April, we launched our 5G network for selected customers,” said Olaf Swantee, CEO of Sunrise.

“This makes us the first 5G provider in Switzerland and Europe. Since then, we have successfully extended our lead. The Sunrise 5G network is the biggest in the country and sets a benchmark in terms of coverage quality.

“We do not differentiate between ‘fast’ and ‘wide’, between fast and slow 5G. Private and business customers want good and fast 5G coverage. That’s why we will also be offering 5G coverage in all Sunrise Shops by the end of the year. In addition to this, we will be launching a dedicated solution for companies, allowing them to benefit from 5G as soon as possible to aid their digitization.”

The first phase of this 5G push is upgrading existing cell sites. This is the simplest aspect of the strategy, though with Huawei’s ‘LampSite’ solution the Sunrise team is addressing the indoor coverage dilemma. As the focus on indoor coverage moves forward, the team is quickly turning its attention to driving ROI through enterprise solutions.

So, what is different in Switzerland? How have the telcos driven forward so quickly into the 5G era?

Firstly, you must take into account the size of the country. At 41,284 km2, Switzerland is ranked 132nd worldwide. It is not massive. And with a population of roughly 8.5 million, it is listed at 99th globally.

Secondly, ARPU is notably higher in Switzerland. During the last quarter, ARPU for post-paid customers was £32.01 for Sunrise. This compares to £20.7 at EE in the UK or £15.33 in France with Orange. Not only does this offer more free cash to drive network investments, it provides more security and confidence when judging ROI.

Thirdly, competition is critically important here. With Swisscom being aggressive with its own rollout, Sunrise has to keep pace. And the faster Sunrise moves, it drags Swisscom forward as well. It is competition at its finest, a virtuous cycle.

Finally, the presence of Olaf Swantee should not be underestimated. As Ovum’s Paul Lambert points out, Swantee is aware to the power of 5G, and having led EE’s successful 4G deployment, the drive and experience to move into the next generation is right at the top of the organization.

Sunrise is not particularly in the same league as Swisscom for the moment, though an aggressive push towards 5G could bridge the gap (6.3 million subscribers at Swisscom, versus 2.4 million at Sunrise). This appears to be the strategy employed by Sunrise according to Lambert; scaled 5G coverage offers a differentiator for the telco and an opportunity to capture higher paying customers.

What is worth noting is population coverage is very different to geographical coverage. Switzerland is a highly urbanised country, roughly 73% live in urban environments, easing the demands on network deployment. When you look at the rural landscapes in Switzerland however, the challenges start to mount up very quickly.

This is a common trait in the majority of the markets where 5G has gotten off to a flying start. South Korea is another example of a market moving very quickly towards the 5G era, and once again, it is a highly-urbanised country. The UK is a third which has the advantage of a relatively small land mass, combined with a concentrated population.

Although these are factors which will simplify the network deployment equation, that should not take away from the progress being made across the Swiss telco industry. In the absence of coverage obligations, good old competition and ambition is driving the agenda.

Google writes opening line of Huawei smartphone obituary

Huawei’s next flagship smartphone will not feature official Google applications as the weight of the US ban finally hits home.

Speaking to reporters in the US, and first reported by Reuters, a Google spokesperson said the Huawei Mate 30 rumoured to be launched in October, cannot be sold with licensed Google apps and services. This is a significant setback to Huawei’s consumer division and begs the question as to whether anyone would now consider the devices without the Android OS and supporting app ecosystem.

The blow from Google of course leads back to the White House. In entering Huawei and its affiliate companies on the Entity List, US suppliers are banned from supplying any products, components or services to the Chinese vendor. This includes Google, with its horde of popular applications and platforms.

There has of course been a moment of reprieve for some US suppliers. President Trump said there will be an extension on the ‘grace period’ afforded to Huawei and its US supply chain, though Google has now stated this only applies to devices which are already on the market. As long as the conflict between Beijing and Washington persists, it looks like the new Huawei devices will have a Google-shaped hole in them.

Although Google has not confirmed whether it has applied for an exemption from the ban, it has said in previous months it wishes to continue working with Huawei. Of the 130 applications sent to the US Commerce Department to seek a special licence to continue working with Huawei, none have been accepted thus far.

This is of course not as simple a situation as one might expect. Google owns Android, the open-sourced operating system. Huawei is not banned from using Android, it can’t be, but it is banned from being an official Android partner of Google. This means it will not be entitled to security and performance updates as soon as there are available. It can use the basic Android building blocks, but it will effectively have to build its own OS, which it has pretty much already done, but it will be a completely different product.

The confirmation from Google here is the news many Huawei fans will not want to have heard. The Mate 30 will not feature popular applications such as Google Maps, or the Goole Play Store where users can download other apps. These are only two examples, though they are critical elements of any Android smartphone.

The question which remains is whether anyone will buy a Huawei smartphone now?

We suspect not, assuming they have kept up-to-date with developments or done the slightest bit of research. There will of course be a market for Huawei in China, there is a sense of patriotism there propping up the business, though this could be the beginning of the end for Huawei in Western (perhaps all international?) markets.

A Google-less future is the new status-quo for Huawei, and unless this changes quickly, we suspect its smartphone business will be a shadow of its former-self in a very short period of time.

For those who have been plotting and scheming the downfall of Huawei, this is the first sign of success. For months, the Chinese vendor seemed to be immune to the collateral damage from the US/Chinese trade-war, though now it has finally hit home.

The consumer business unit has been very kind to Huawei executives over the last couple of years. Thanks to the creation of consumer devices which performed well and were reasonably-priced, and an extensive above-the-line advertising campaign to drive the Huawei brand, Huawei has become one of the most popular consumer electronics brands worldwide. It has consistently been the number two smartphone brand for shipments globally in recent years, while the consumer business group is now the largest contributor to group revenues at the firm.

In its recent financial statement, Huawei reported another year-on-year revenue increase, though it did appear growth in the smartphone business was driven by domestic smartphone sales. Research from Canalys suggests smartphone sales in Western Europe were down for the second quarter by 16%, with Samsung and Xiaomi benefitting. Unless the situation changes, we cannot see anything but a dramatic decline in Huawei smartphone sales in Western markets, and perhaps this misery will spread to all of Huawei’s international market.

This is currently an incredibly profitably and valuable business to Huawei executives and shareholders, though now it appears it has been cut-down at the knees by the White House and the Trump administration.