Published: Fri, December 28, 2018
Markets | By Erika Turner

Huawei & ZTE may be squeezed out of U.S. market

Huawei & ZTE may be squeezed out of U.S. market

An executive order is said to have been drafted for Mr Trump which, if signed in the new year, will prohibit Huawei and ZTE from doing business in the US.

Specifically, the executive order would allegedly order the U.S. Commerce Department to bar U.S. companies from using parts and equipment from companies that the government believes could pose a national security risk. The two companies have been accused in the past of violating worldwide sanctions resulting in conflict with the U.S. There is also a general belief by many in government that the two companies may be embedding technology in their equipment that could be used to spy on the U.S. or even shut down wireless networks remotely.

A bill in August barred the United States government from buying Huawei and ZTE equipment.

Earlier in August, President Trump had signed an order banning Huawei and ZTE tech from use by the USA government and government contractors.

The names of the two companies will most likely be omitted in the order but, Commerce Department officials "would interpret it as authorization to limit the spread of equipment" made by Huawei and ZTE.

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The US has long harboured the grouse that the telecom giants are tightly controlled by Chinese government and their equipment would be used as backdoor spying channels by Beijing.

The issue has new urgency as U.S. wireless carriers look for partners as they prepare to adopt next-generation 5G wireless networks. Both Huawei and ZTE have denied all allegations.

"We've got to look at what partners such as Australia and the U.S. are doing in order to ensure that they have the maximum security of that 5G network", he said. All carriers are now in the process of implementing 5G capabilities and access to less expensive equipment for these upgrades is important for rural carriers who have far fewer customers to spread costs to.

It would cost US$800 million to US$1 billion for all RWA members to replace their Huawei and ZTE equipment, Bennet said. Huawei has said that it is still actively participating in 5G trials or receiving bids from companies in the UK, France, Germany and Japan.

It said however, that it would still use some of the company's equipment for products deemed to not be at the core of the network. Countries that look for alternatives to Huawei equipment, research has concluded, will be behind the curve when it comes to developing applications for the next generation networks.

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