LG Uplus Under U.S. Pressure to Stop Using Huawei Equipment
Recently, U.S. Secretary of State Mike Pompeo publicly referred to SK Telecom and KT, two Korean mobile carriers which do not use Huawei equipment, as “clean” companies. With respect to LG Uplus’ use of Huawei equipment, Robert Strayer, deputy assistant secretary of state for cyber and international communications and information policy, said that the U.S. government will not give LG Uplus economic incentives if it continues to use equipment from Huawei and considers the company’s use of Huawei equipment a serious security issue. He made the comment in a video briefing session hosted by the New York Foreign Press Center.
The U.S.-China conflict is negatively affecting the Korean telecom industry. Since 2019, the United States has been pushing for kicking Chinese IT company Huawei out of the international community. Until recently, Europe has been keeping a certain distance from the U.S. move.
However, the Hong Kong crisis changed the situation. The British government recently declared in a surprise move that it would remove Huawei's telecommunications equipment by 2027.
The Donald Trump administration is requesting its major allies in the world including Korea and some European countries not to adopt equipment from Huawei and to remove all existing Huawei equipment.
The United States’ influence in the international IT market cannot be ignored. As diplomatic issues are involved, Korean mobile carriers feel burdensome to clarify their positions on Huawei equipment, regardless of whether they use it or not
The government is embarrassed, too. As the issue of Huawei expulsion is becoming a political and diplomatic issue, the Korean Ministry of Foreign Affair as well as the Korean Ministry of Science and ICT, have taken a step back, saying, “It is up to companies."
Among Korean telecommunication companies, LG Uplus is using Huawei 4G LTE and 5G equipment. Other companies do not use Huawei equipment in their mobile networks, but most of them are using Huawei's equipment for their wired networks, so they are paying keen attention to U.S. authorities' pressure to remove Huawei equipment.
Not only Korean telecommunication companies but also large Korean companies, financial companies, and public institutions are directly or indirectly using Huawei's equipment for their internal networks, which explains why they are not totally free from the controversy.
In particular, as the conflict between the United States and China is spreading to LG Uplus, which uses Huawei's mobile telecommunication equipment, the Korean telecommunication industry is under increasing pressure.
The U.S. government continues to maintain its view that Huawei's technology can be used as a monitoring tool for the Chinese Communist Party, even though Huawei finally acquired a Common Criteria EAL4+ certificate for its 5G base station equipment for the first time in June. Huawei has declared that it has secured international credibility for its 5G wireless network equipment by obtaining the international security certificate, but the tug of war on the use of Huawei equipment is intensifying as the U.S.-China conflict has escalated from a trade dispute to a political confrontation.
The Korean telecommunications industry is staying mum about the Huawei issue, but if Huawei equipment is removed as requested by the U.S. administration, the cost will be astronomical. Cost burden kindled by the removal of Huawei's equipment is also a big issue in the United Kingdom, which has already announced the removal of Huawei equipment.
In the U.K., Oliver Dowden, secretary of state for digital, culture, media and sport stated in the House of Commons on July 14 that about 2 billion pounds would be needed to remove Huawei's equipment. Howard Watson, chief technology officer (CTO) of BT, warned that a removal of Hwawei equipment can cause power outages to 2G, 3G, and 4G users as well as 5G users across the nation.
The Korean Ministry of Science and ICT recently announced a plan to establish a nationwide 5G network by 2022. If LG Uplus is forced to replace Huawei's base station equipment with equipment from other vendors, the plan is bound to suffer a delay. At the request of the government, the three Korean mobile carriers decided to invest 24.5 trillion won to 25.7 trillion won by 2022 to expand their wired and wireless telecommunication infrastructure.