He suggests that if Huawei lost some 5G equipment orders from China Mobile, the nation’s leading carrier, it will also likely lose subsequent contracts and income over the next three to five years. Photo: FacebookĮric Mer, a Peking University associate professor of politics, notes that 5G base stations and related assets like modems are long-term investments. Malaysia has opted for Ericsson over Huawei to develop its 5G infrastructure. Huawei founder Ren Zhengfei told a staff assembly earlier this year that the company would continue to excel in the lucrative carrier business in its home market and that revenues from selling 5G base stations and related equipment, support and maintenance contracts would be a “bulwark” against its badly slumping smartphone sales.īut China Mobile’s future 5G-related procurements from Qualcomm rather than Huawei raises certain new questions about the company’s strategy, particularly as countries from India to Malaysia have taken America’s security warnings to heart and opted for other equipment suppliers. The company moved to pitch its hardware and solutions at Chinese carriers with deep discounts, as it sought to extend its lead in 5G rollout and commercialization over Western rivals like Ericsson and Nokia. When China’s 5G investment spree started in 2018, Huawei benefitted from Beijing’s self-reliant drive to procure more domestically made equipment. Significantly, China’s future 5G-related spending may no longer represent a windfall for Huawei. In November, Huawei sold off its Honor brand mobile phone due to US restrictions. Its so-called enterprise unit was up 18% to 36 billion yuan. Huawei said that its carrier business was down 14% to 137 billion yuan while its consumer unit declined from 221 billion yuan to 136 billion yuan. Last week, Huawei reported its first-half revenues were down 29.4% year on year, from 454 billion yuan to 320 billion yuan, a dire result company executives said was expected. Huawei and ZTE together won roughly 90% of the base station contracts despite US sanctions, the reports said.īut those punitive US bans are hitting hard Huawei’s bottom line. Huawei recently won 60% of China Mobile’s 5G base station supply contracts, the South China Morning Post and others reported. To be sure, China Mobile is not cutting ties with Huawei. Other reports suggested that Huawei bowed out of the bidding on the China Mobile contract due to future output and delivery concerns amid the US chip ban. Qualcomm has bagged half of China Mobile’s latest orders for 320,000 5G modems. Taiwan’s TSMC, the world’s leading high-end chip maker, is required to comply with US-imposed punitive export controls on Huawei. The publications reported that Qualcomm’s cutting-edge X55 5G Modem-RF System powered by TSMC-made 7-nanometer chips would support multi-band, ultrafast 5G connections.Ĭhina Mobile risked losing its competitiveness in connection speeds and therefore future customers, especially industrial users from the manufacturing sector, if it chose Huawei’s alternative products, which reportedly lack the same Western and Taiwanese-made chips, the same reports said. Tencent News and the Shanghai-based National Business Daily reported that Huawei was frozen out due to its “inferior equipment performance.” Significantly, Huawei was not awarded any of the related equipment contracts while Qualcomm and its joint venture partners reportedly won half the orders for 320,000 5G modem sets, which are key to linking various devices with 5G base stations.Ĭhina Mobile’s procurement of modem-to-antenna multimode devices from Qualcomm aims to accelerate the carrier’s 5G rollout and industrial application across the nation, according to local media reports. Earlier this month, China Mobile announced the tender results of its plans for 20, which included procurements of key 5G related equipment.
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