US Official Suggests Finance Offer To Move Others Away From Huawei 5G

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The US government is willing to finance 5G telecom purchases to help others step away from Huawei, the Associated Press reports. The statement — attributed to U.S. undersecretary of state for Economic Growth, Energy, and the Environment Keith Krach — comes as concerns continue to mount about the security of Huawei's offerings. In fact, both the US and its allies would be willing to offer financing tools and other associated 'things'.

The undersecretary says that even offering Huawei a small role in the technology would be giving too much. The technology will be utilized to interconnect effectively everything from smart cars to smartphones. And, Mr. Krach says, the US and other recognize the danger in that. Any exemptions, he says will allow the Chinese government to expand its "surveillance state."

Other, older equipment should be removed as well, according to the official. "This is definitely the time to do a rip-and-replace transition," Mr. Krach asserts.

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Huawei is having on-again/off-again 5G success despite US interference

No details have been provided with regard to exactly what financing options the US government might put forward. And it isn't immediately clear whether comments about removing legacy Huawei equipment from existing networks would be a condition of that financing either. The US government has been strongly demanding its allies to cease interactions with Huawei throughout the Trump Administration.

In some cases, the US has gone so far as to threaten an end to intelligence cooperation for those countries that allow Huawei in.

That, as well as Huawei and its associated brands being added to the US Entity List, have pushed the Chinese tech giant through a rollercoaster of changes over the past year. Its addition to the list in 2019 prevents any US companies, without a special license, from participating in business with Huawei. That's either directly or indirectly. Those licenses, subsequently, have been made difficult to obtain.

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Other companies around the globe have fallen largely in line with that. That's forcing Huawei to turn inward in search of components, partners, research, development, and other aspects of its business.

Despite all of that and more, Huawei has risen to second place in the overall smartphone market. It even briefly surpassed Samsung this year, despite having no access to Google Play apps or services. And it remains the top company on 5G and mobile networking.

Where is this offer from the US leading?

That situation has led to leadership from Qualcomm's CEO and former Google CEO and chair to the Pentagon Defence Innovation Board Eric Schmidt speaking out, among others. Mr. Schmidt took aim at both Huawei's practices and the current US administration last week over the state of affairs.

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Huawei has largely denied in terms of official US accusations about spying and working for the Chinese government. But Mr. Schmidt indicates that there is some truth to concerns about its practices. And simultaneously that the US needs to work with Huawei on standards and compete with it to alleviate the problem.

Huawei may face an even steeper uphill battle on 5G, now that the US officially appears to be offering to finance on alternative solutions. The country also recently determined that working with Huawei on the standards is reasonable. So companies will be able to conduct business on that front, at the very least.

All of that that falls in line with Mr. Schmidt's statements as well as those from Qualcomm's CEO. That's if companies operating in the US and elsewhere are able to help and countries decide to get in on the offer. The government is reportedly already in talks with Brazil on the matter.

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In effect, the hope seems to be that Huawei's stranglehold on the 5G networking space will be significantly challenged. But that it will still be able to compete and it will still be a part of the discussion on standards. Without, of course, presenting the threat US officials claim it is and which it has continuously denied presenting.