The United States has offered to pay for Brazil’s 5G roll out if only the South American country will disengage Huawei. Brazil offered hope to Huawei amidst intense attempts from the US to stop its dominance in 5G technology.
Other countries like Canada, France and the UK are also receiving fierce pressure from the US to dump Huawei. The Chinese company’s newly found succor in Brazil has been dampened by this move.
In an interview with Brazilian newspaper Folha de S Paulo, the US ambassador to Brazil Todd Chapman said the move to push Huawei out of Brazil is a matter of “national security” to Washington and the aim is to “protect data and intellectual property, as well as sensitive information of nations.” That has been what the American government has dwelt on to administer every of its oppressive moves against the telecom company.
Huawei has been working to establish itself in the Brazilian telecom market for the last two decades which sets it up for a big loss if the US reaches a deal with Brazil. According to TFIpost, the company has conducted 5G trials with all major telecom companies in the South American country including Telefonica Brasil SA, TIM Participacoes SA, America’s Movil Claro, and Oi SA. It is also planning to set up a factory in Sao Paulo with an investment of 800 million in 2022.
Huawei has been taking cover under these existing footprints until the US showed up with this irresistible deal that has got Brazil to reassess its relationship with the tech company. The American government wants Huawei replaced by its European counterparts, Ericsson and Nokia, and has been urging its allies to embrace them instead of Huawei.
About two weeks ago, Canada showed Huawei the door following pressure from the US. Canadian telecom carriers – BCE Inc and Telus Corp have decided to use Nokia and Ericsson’s equipment in their 5G rollout. The decision has however, created tension between China and Canada.
The United States appears to be acting from the same playbook as it pushes for a global action against Huawei over perceived security challenges that may follow Huawei’s deployment of 5G. The rest of the world seems to be gradually yielding to the US call. The number of countries willing to give up on Huawei has been increasing since the outbreak of coronavirus. Many believe that somehow China is culpable but has refused to come clean and it confirms the fears that a company of Chinese origin cannot be entrusted with the deployment of a sensitive technology like the 5G.
Chapman echoed the sentiment of many leaders who are confronted with the decision to choose between Huawei and others in 5G roll out: “Who wants to make investments in countries where their information will not be protected?” he said.
Huawei offers the cheapest and most sophisticated equipment in 5G deployment, but has been increasingly rejected by countries out of concern that the Chinese government uses the technology as a spy tool. The situation has offered an unprecedented lifeline to dying Finish Nokia and Swedish Ericsson.
Globally, the 10 companies selling the 5G equipment are; Altiostar, Cisco Systems, Datang, Telecom/Fiberhome, Ericsson, Huawei, Nokia, Qualcomm, Samsung, and ZTE. But three Chinese companies, Huawei, Datang and ZTE lead the global race in 5G roll out due to their cheap and sophisticated products and services.
Donald Trump’s administration has instigated a global backlash against the Chinese companies, leaving them to beg for survival. The newly introduced ban on sale of semiconductors to Huawei by the US authorities has so far done more harm to the company than the number of countries rejecting its services.
Last year, when Huawei was kicked out of the US, it was counting on other countries around the world to stay in business. The US pressure on these countries has ensured a dashed hope and compounded woes for the Chinese company.
The relentless clampdown on Huawei by the United States government has resulted in revival of the Europeans companies, Ericsson and Nokia whose stocks have been trading well recently.
The US has been introducing new ways to punish China and her companies since Trump became president. The new approach of paying for Brazil’s 5G roll out is a precedent that will destroy whatever is left of Huawei and other Chinese companies in the business of 5G.