Will Huawei Sweep Orders for 5G Equipment?

As the 5G frequency auction has ended, people’s attention is shifting to from which companies Korea’s three mobile carriers will buy equipment to build their 5G networks.

In the telecommunication industry, a prospect is strengthening that the three mobile carriers will choose Huawei’s equipment as it is about 30% cheaper than that of competitors such as Samsung Electronics, Nokia and Ericsson. Thus, much attention is also being paid to whether or not the three mobile carriers will contact Huawei in Shanghai as high-ranking executives of the three mobile carriers are scheduled to attend the Mobile World Congress (MWC) Shanghai, a mobile telecommunication technology exhibition in Shanghai, next week.

According to the telecommunications industry, Kwon Young-soo, vice chairman of LG U+, will attend the opening ceremony of the MWC Shanghai and meet with officials from China's telecommunication companies on June 27. As LG U+ is using Huawei equipment in its LTE network, Kwon is expected to make contact with Huawei officials. Huawei will set up the biggest booth in the MWC Shanghai and has secured high-level technology on the 3.5GHz frequency band selected for nationwide 5G networks by the three Korean telecom companies.

However, there are still many voices which call into question security matters regarding the introduction of Huawei equipment. This is because due to the nature of China, a socialist country, Huawei cannot reject the Chinese government’s request to eavesdrop via Huawei telecommunication equipment. "Concerns about telecommunication security issues are ridiculous, and the bugging issue does not hold any water," Huawei said. However, there is still a lot of concern in the US among others.

As roughly 20 trillion won (US$18 billion) will be invested in purchasing telecommunication equipment for 5G networks, there is concern that if Huawei takes all orders from the three Korean mobile carriers, 5G commercialization will only benefit the Chinese company. This is because even if 5G is commercialized in March next year, it will be difficult to secure a proper business model (BM) so only Huawei will be able to take all of the fruits of 5G commercialization.

"Security concerns over Huawei telecommunications equipment will not disappear easily as they are connected with the Chinese government," said an official in the telecommunication industry. "Even though Huawei aspires to become the No. 1 telecom equipment maker in the 5G market, surpassing Ericsson and Nokia, the Chinese company has to focus on addressing mobile carriers’ doubts."