5G competition

Why the US campaign against Huawei will fail in Africa

By Eric Olander

Posted on July 20, 2020 16:28

The United States has been trying for years to discourage countries from using network equipment from Chinese company Huawei.

For the first time in years, the United States is seeing progress in its relentless effort to persuade/force/cajole (it really depends on your viewpoint) countries against using networking equipment from the Chinese telecom giant Huawei. The UK’s recent decision to ban Huawei gear from its new 5G network and the government’s order to remove all existing equipment made by the company before 2027 is a huge win for the US government.

And now, following its violent border clash with China, India is also considering shunning Huawei. This would no doubt be a significant setback for the Shenzhen-based company.

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“The tide is turning against Huawei,” declared US Secretary of State Mike Pompeo last month in anticipation of July’s announcement by the British government.

But Pompeo’s excitement about the supposed demise of Huawei may be a tad premature.

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First of all, the numbers are not on his side. Even under intense US pressure, slowing smartphone sales and, of course, the COVID-19 crisis around the world, Huawei still managed to beat last year’s first-half revenue by a respectable 13.1%.

Then, there’s Africa… and most likely much of the rest of the Global South, where the US messaging on Huawei is basically dead on arrival.

The State Department’s zero-sum, binary approach to the Huawei issue will probably never gain traction in Africa. While countries like Britain and Germany are wealthy enough to pull out the Huawei gear from their networks and replace it with equipment from Samsung, Ericsson or Nokia, that is not the case in developing countries.

Not only is Huawei equipment typically more affordable than its South Korean and European competitors, but it also comes with generous (often government-backed) concessional financing. Now, to be fair, South Korea’s Exim Bank also offers financing to support purchases of Samsung’s 5G equipment, but nowhere near the scale of what China does to support Huawei around the world.

Politics aside (wishful thinking, I know), even if African governments and telecom operators were open to the American request, if nobody puts money on the table to pay off Africa’s existing loans for its current Huawei networking equipment, as well as new money to buy South Korean or European replacements, there’s really nothing to talk about.

So, this explains in part why the State Department’s zero-sum, binary approach to the Huawei issue will probably never gain traction in Africa. The Americans will have to come up with creative compromises if they want to meaningfully engage Africans on network security.

This means acknowledging that companies like Safaricom are committed to Huawei, but in order to avoid sanctions, they’ll have to overlay a software security solution to become compatible with US requirements. Think of it as a digital prophylactic.

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To date, we’re not hearing this kind of practical, results-oriented rhetoric coming out of the US which is why Huawei, at least for the moment, really doesn’t have that much to worry about in most of the rest of the world.

This article was first published in The China Africa Project. 

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