It seems like there are some takers for the offer Huawei made in September after all. Vincent Pang, the company's senior vice president and board director, recently revealed this. And surprisingly, the companies that have expressed interest in buying Huawei's 5G network technology are based in America.
The talks have just started and Pang hasn't revealed the specifics. Thus, we don't know which companies might buy Huawei's 5G network technology. Pang says that telecom operators are considering both long-term deals and one-time transfers.
The Talks Are In Early Stages
Pang says that it will take a long time to finalize everything and that's understandable. Apparently, talks began a couple of weeks back and have not reached a detailed level yet. It will take a rather long time before anything is finalized. In the coming months, we will likely hear more about this.
The U.S. has banned all 5G equipment from Huawei over fears that the company's gear comes with a backdoor to spy on other countries. Moreover, it has also successfully convinced some Western allies to not procure the Chinese giant's 5G equipment too. Of course, Huawei has denied these claims.
Huawei is apparently quite ahead of its main rivals Nokia and Ericsson when it comes to the next generation of wireless technology. It has invested a huge amount into the technology and it is key to the company's revenue growth.
Buying Huawei's 5G Network Technology Can Help U.S. Firms Compete With Rivals
Last month, the company's CEO Ren Zhengfei said that Huawei's 5G network technology is up for sale. This will allow the buyer to get access to the existing patents, code, licenses, technical plans, and manufacturing know-how. After that, the purchasers will be able to modify source code and use the resources according to their wishes. This way there will be no fear of spying.
Side by side, Huawei will also be free to develop the technology as it wants. The money from the deal will allow the Chinese giant to advance further. Although the cost of Huawei's 5G network technology is not known, its value is estimated to be tens of billions of dollars.
So far, the Chine tech juggernaut has entered more than 60 commercial contracts for 5G with carriers around the work. It also says it has sold over 400,000 5G Massive MIMO active antenna units (AAUs). However, given that its supply of critical components is reportedly running low and smartphone sales are expected to take a hit, its cash flows certainly need a boost. And licensing its 5G technology can help it do just that.
Nokia and Ericsson's networking equipment is pricier than Huawei's. Moreover, they both are European companies. If the U.S. Commerce Department allows the deal to go through, it will help with creating a stronger local telecommunications industry that can better compete with Chinese and European rivals. After all, there are no 5G equipment makers in the U.S. right now. However, given the American government's skepticism of Huawei, this doesn't seem very likely.