Huawei has been hit hard by the Trump Ban, but in the midst of it all, there is one bright spot: the company's 5G patents and investment in 5G R&D. Yesterday, Huawei renewed its commitment to 5G, saying that it will increase its 5G investments despite the Trump Ban.
At the 11th Huawei user group meeting in Wuzhen, China, Huawei Executive Director and Carrier BG CEO Ryan Ding said that 5G development would result in four phases for carriers: planning, deployment, operations, and optimization. "We will continue to increase investment in 5G and work with our customers to make this vision a reality," Ding said.
The Shenzhen-based company said that it is ready to make 5G a tangible reality for carriers and partners with an end-to-end solution in everything from networking products to system chips. Currently, Huawei has invested 10 billion yuan in 5G R&D. It's now been in 5G investments for ten years, since 2009. Huawei has deployed 7.4 million FTTX lines and built more than 800 cloud data centers in over 170 countries and regions worldwide.
Huawei has invested heavily in 5G in China over the years, but the corporation holds 15% of all 5G patents globally. Alongside continued investment in 5G and an end-to-end solution, Huawei will continue to file patents for the technology or claim them.
Earlier this year, Huawei teamed up with LG Uplus to provide 10,000 live 5G cell sites in South Korea. The two made the 5G deployment announcement at MWC 2019.
Huawei is the target of the current Trump Ban. To strike back at China, US President Donald Trump decided to go after the best of Chinese businesses, Huawei one of the foremost in all of the country. Last month, President Trump placed Huawei on the US Entity List and told American companies they would have to request permission from the US Government to do business with Huawei. Google followed suit, not wanting to appear as a rebel, and revoked Huawei's Android license.
Huawei has seen not only its Android license revoked but also partners such as Qualcomm, Intel, Microsoft, Micron, and British entity ARM pull away from the Chinese OEM. Without the support of these partners, Huawei is dependent upon Chinese manufacturers that may or may not be able to keep up with the demand for Huawei phones. Walmart and B&H Photo have responded by simply removing Huawei phones from their inventories, while FedEx has denied Huawei phone shipments to buyers. Sales in Germany and Spain have declined, and Huawei could lose up to $30 billion over the next two years as a result.
On the 5G front, Huawei has been cut off from 5G investments in the US, with the FCC requesting that neither T-Mobile nor Sprint employ Huawei networking equipment when deploying their 5G networks in the upcoming New T-Mobile merger. Huawei still owns 15% of all 5G patents and thus has access to a number of royalties. Lately, it has been calling those patent royalties in, squaring off with US carrier Verizon Wireless for $1 billion related to 5G royalties.
In addition to declining sales in Germany and Spain, and Huawei's complete rejection in the US, European carriers are also refusing to sell Huawei devices, including EE, Vodafone, and BT. EE has halted sales of every Huawei device. Vodafone, once opening up pre-orders for Huawei's upcoming Mate 20 X 5G, has reversed its plans and is no longer doing so. Outside of China, Europe is one of Huawei's most profitable regions in the smartphone and 5G markets.