I’ll admit that I haven’t written too much about ZTE or Huawei lately. First of all I have to admit that I wasn’t even sure ZTE was still in business. Huawei’s been a big deal in other parts of the world, but they don’t sell phones in the US anymore. Now, it’s looking like neither of these two Chinese companies will be selling anything in the US.
Did the government do something right?
The FCC issued a statement labeling both companies as security threats. This means that individual communications companies can’t tap any government funding to buy Huawei or ZTE products, even if they were able to somehow get them into the country. This is the latest move against the two companies. Neither company can buy or use American technologies, meaning they’re locked out of using Android as an operating system. This has led both to focus more on equipment for large network switching operations and less on consumer goods.
As far as I was able to tell, the FCC isn’t approving any new equipment from the two companies, and that’s a problem for them. Huawei hoped to benefit from the transition to 5G but now finds itself all but locked out of the move to 5G.
Still it’s a “largely symbolic” move
Check out other articles on this subject and you’ll find the words “largely symbolic” in pretty much all of them. None of the major carriers use Huawei or ZTE equipment. Since May 2019, no US company can use telecommunications equipment from any country that “poses a national security risk.” This move just makes it clear that the two companies fall under that edict.
Huawei especially has been scrutinized for nearly a decade for a potential spyware issue in some of its network equipment. Even back during the days when Sprint was negotiating its own sale to Japanese tech giant Softbank, Huawei equipment was seen as a problem. Softbank used it, and Sprint did not. In 2013, both Sprint and Softbank vowed to stop using Huawei equipment and as far as I can tell, they did.
Will this actually make a difference to Huawei and ZTE?
These days, other countries don’t automatically follow the US’s lead when it comes to matters of national security. Still, it’s beginning to look like India is also looking at Huawei as a potential threat. India’s economy isn’t as large as ours, but there are more people and that probably means there’s more cellular capacity. Locking Huawei out of the Indian market would be a blow to a company that’s already locked out of ours. Still there are a lot of other markets out there and both ZTE and Huawei could easily pivot toward them. Losing India and the US would mean that roughly 1/8 of the planet wasn’t open to them but that’s still not enough to stop a global company.