While talking to reporters in Barcelona during the MWC, Vodafone's CEO Nick Read said that not using Huawei's equipment for Europe's 5G networks could be highly disadvantageous and may delay the rollout of 5G services by two years. With over 700 million subscribers around the world, Vodafone is the second largest mobile carrier in the world and thus, its words have a lot of weight. Huawei and Vodafone jointly carried out a 5G demonstration on Monday in Barcelona, clearly sending out a signal that Vodafone isn't about to exclude Huawei from its operations any time soon.
The Chinese companies Huawei and ZTE have been singled out by the U.S. on the basis of concerns that their equipment could contain backdoors that the Chinese government can use for eavesdropping on other countries. The U.S. hasn't just shut out the two companies itself, it's also urging allies to do the same. In fact, U.S Secretary of State Mike Pompeo recently warned eastern European countries that they may miss out on future partnership opportunities with the U.S. if they continue to work with Huawei. However, as Read has pointed out, it's not all that simple.
First off, Read says that if the U.S. has any evidence against Huawei, it must be presented to the European authorities. He stressed upon the need for a fact-based assessment, which implies that the company wouldn't ban Huawei on the basis of speculation alone. Read also shed light on the fact that there are currently three major players in the mobile infrastructure market: Huawei, Ericsson, and Nokia, and excluding Huawei would reduce the already scant choices the European operators have. Moreover, Huawei has an edge over its rivals in that it sells high-tech hardware at lower costs. Most industry experts believe that Ericsson and Nokia simply do not have the technology and resources to replace Huawei if it's banned. And then, of course, there is the concern that banning Huawei would lead to a duopoly condition in the market and limit competition and innovation.
The U.S. first raised concerns about Huawei and ZTE back in 2012 and two have been largely been unable to supply their gear to the key U.S. service providers. Vodafone, on the other hand, is hugely dependent on Huawei. The company says that excluding Huawei from its 5G networks isn't going to be that easy as the company's products are already a part of 4G networks in Europe and form the basis of the new technology. A major equipment swap would not just be very expensive, but also highly disruptive to the national infrastructure. The U.S. doesn't have to worry about these issues as it doesn't use Huawei's equipment anyway.
Back in January, Vodafone said it would pause deploying Huawei's gear in its core mobile network, where information is routed and processed, but it continued rolling out the company's 5G radio equipment at pace. Vodafone continues to interact with governments to receive more clarity on any possible risks. Britain has recently said that it doesn't see any evidence that ties Huawei with any malicious activities.
Meanwhile, perhaps in a bid to cover all bases, Vodafone is considering other partnerships for its mobile tower infrastructure. It recently entered a deal with Telecom Italia for faster deployment of the next generation of wireless mobile networks and says that it plans to form more partnerships in the future. Huawei, on the other hand, is apparently sitting pretty, safe in the knowledge that its 12 months ahead of rivals as far as 5G technology is concerned.