Swedish Court Gives Huawei a Lifeline As Brazil Operators Resist US pressure to Axe the Chinese Company

Swedish Court Gives Huawei a Lifeline As Brazil Operators Resist US pressure to Axe the Chinese Company

Huawei has got a lifeline in Sweden after a court on Monday suspended parts of the decision that had excluded it from participating in the 5G spectrum auction. The decision has forced Sweden’s telecoms regulator PTS to halt the auction.

The Chinese telecom company has been at the center of discussion of every 5G network roll-out, a situation instigated by the United States’ security concern. The US has been wary that the Chinese government would access information from Huawei, compromising its national security as well as those of its allies.

Against this backdrop, the United Kingdom had in July, severed ties with Huawei. As the pressure from the US mounts, many countries have succumbed to it by kicking Huawei out.

PTS had announced earlier it booted Huawei out of its 5G spectrum due to security concerns. But the telecom had appealed the decision.

The Stockholm administrative court said in the decision that certain parts of PTS’ decision prior to the upcoming 5G auctions will not apply until further notice. That means, Huawei will be allowed to participate in the impending 5G spectrum auction.

Kenneth Fredriksen, Huawei’s executive vice president, Central East Europe and Nordic Region, told Reuters that the company has no further intention of legal action against the Swedish authorities, and at this point, they are waiting to have constructive dialogue.

Most parts of the world have been pushing to cage Huwaei

“We are willing to cooperate fully in terms of any future requirements they may put as a supplier of 5G equipment that will enable us to be a certified vendor,” he said.

The bans on Huawei have placed Finish Nokia and Swedish Ericsson in a lucrative position as their participation in the 5G roll out has increased significantly in the past few months. They were expected to fill in the gap created by Huawei’s ouster.

The PTS approved the participation of Sweden’s Hi3G Access, Net4Mobility, Telia Sverige and Teracom in the planned spectrum auction of 3.5 GHZ and 2.3 GHz, key bands crucial for the roll out of 5G.

Tele2 and Telenor will participate together as Net4Mobility to secure spectrum for a joint nationwide 5G network.

The auctions were expected to start from Tuesday. PTS said it has informed the operators about the halt and would review the possibility of starting the process as soon as possible.

“This is not a victory for Huawei and it is not a loss for the Swedish government,” said industry consultant John Strand. “The uncertainty related to the condition for the auction is the reason PTS is halting the auction process.”

Senior Judge John Johan Lundmark said in a court statement that “the decision granting a stay means that the terms concerning, among other things, the use of products from Huawei until further notice do not apply during the Administrative Court’s continued deliberation of the case.”

However, the ruling could set a precedent that will impact governments’ actions toward Huawei in other countries.

Last week, top four telecom companies in Brazil had shunned the invitation of US official, Ambassador Todd Chapman. He had invited them to the US embassy in Sao Paulo, to meet visiting under secretary of state for economic growth, energy and the environment Keith Krach.

The carriers had turned down the invitation because he had advocated excluding Huawei from the Brazilian 5G equipment market, according to people familiar with the matter.

US has also pushed against Huawei

“This invitation is not compatible with free market choices that we are used to. We should be able to freely make best financial decisions,” they said.

Telecom companies in Brazil, such as Telefonica Brazil, TIM  participaçôes, controlled by Telecom Italia SpA and Claro, owned by Mexico’s America Movil, each control between 19% and 29% of Brazil’s wireless market, according to Reuters.

They already use Huawei equipment in preparation for the auctioning of spectrum concessions next year in Brazil and do not entertain the idea of Huawei ban being pushed by the US.

Brazil is among few countries trying to resist the diplomatic pressure from the US to throw off Huawei.

In Europe, following the UK’s decision to oust the Chinese telecom, other countries are already taking the same step or contemplating to do so.

But the Swedish court’s decision seems to have amplified Huawei’s chances to be part of 5G auctions through legal contests.

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