It’s no secret that embattled Chinese telecom giant Huawei could be stonewalled from bidding on 5G wireless network contracts worldwide worth billions over spying concerns.
It would be a big miss: Spending on 5G-related network equipment will hit $26 billion in 2022, up from $528 million in 2018, researcher IDC estimates. Chinese intelligence subterfuge is the problem: When Huawei officials plead independence from the State, they are met with a blockade of raised eyebrows.
Now, however, Huawei appears to be swinging back, albeit gently, in an attempt to reframe the issue in the court of public opinion. Where it first offered to sign “no spy” agreements with foreign governments, it has turned to sponsored editorials to convince skeptical governments and potential customers that it won’t build back doors into its equipment to enable Chinese spies.
Huawei’s primary argument: Keeping it out of the U.S. is bad for the U.S. economy. Why? It will delay of 5G network deployment and adoption. To make its case, Huawei hired Debra Aron, an economist and Charles River Associates vice president to conduct commissioned research. She presented her work, The Impact on the U.S. Economy of Excluding Huawei from Participation in the U.S. Market for Wireless Network Equipment, at a U.S. General Services Administration (GSA)-related public meeting on July 19, 2019, concluding that a Huawei ban could cost the U.S. up to $240 billion and drive up the price of telecom equipment.
Here’s Aron’s bottom line:
- The cost to exclude Huawei from the U.S. market for radio access network (RAN) equipment will range from $104 billion to $241 billion.
- Barring Huawei will result in reduced GDP over a six-year period. These anticipated losses will result from delays in 5G deployment and adoption, which in turn affect GDP.
- Banning Huawei from the U.S. market has caused RAN equipment prices in the U.S. to be 12-14 percent higher than they would be if Huawei were allowed to compete in the U.S. market.
- It will be costly for carriers (largely, rural carriers) to rip- and-replace Huawei equipment already in place in their networks.
- The U.S. already lags South Korea in 5G deployment and adoption. South Korea reportedly has over 1 million subscribers and substantially more deployment than the U.S.
Huawei has followed with sponsored content placed in The Hill referencing Aron’s data and conclusions. “Throughout history, the U.S. has had a propensity for slowly embracing globally-adopted technology ecosystems, and as a result, has experienced delays in deployment of new wireless technology,” wrote Tim Danks, Huawei vice president of risk management and partner relations, in an op-ed. “Delaying 5G deployment and adoption means losing out on technological, thus economic advancement. So, what is the U.S. waiting for?”
In another branded piece along the same lines, also appearing in The Hill, Joy Tan, Huawei public affairs senior vice president, brought consumers into the arena. “When we look at underserved communities in America, local telecom carriers rely on Huawei to deliver safe connectivity to customers,” she wrote. “There is no positive outcome banning Huawei in the U.S.” She then addressed the spying issue: “Huawei – like it always has – continues to operate independently from the Chinese government, and in doing so, our employees own 100 percent of the company.”
There’s more: Huawei has assumably purchased an entire web page on The Hill listing 12 similarly sponsored op-eds. All of the content was launched on July 24, 2019, and includes both Danks’ and Tan’s pieces. With this new flood of content, can Huawei control the messaging and the dialogue?