By - Adedoyin Shittu
With the history of security concerns over the use Huawei gadgets, it comes with little surprise when the U.S. blacklisted the telecommunication giants and aggressively pursuing its allies to follow suit.
Founded by former People’s Liberation Army engineer, Ren Zhengfei in 1987, Huawei is a typical success story of modern China and what the country aspire to be. Huawei has grown to become the world’s top provider of telecom networking equipment and second biggest smartphone maker second to Samsung and right above Apple. With over $100 billion in revenue a total of 180,000 employees globally, the telecom giant reached the top with barely a footprint in the US market.
This growth was powered by strong growth in Europe and Asia.
HISTORY OF HUAWEI TROUBLES WITH THE US
Huawei’s ties to the Chinese government and military is not a quiet conspiracy. The founder, Ren Zhengfei, was a former technologist in the People’s Liberation Army (PLA) and this is the basis of the U.S. anxiety.
He started the company in 1987 as a contractor for selling, installing and maintenance of server switch and other equipment for a Hong Kong dealer.
As his company grew, so did international concerns about whether Huawei equipment could be used to spy on companies and governments around the world.
Many IT employees have come to regard equipment suppliers as trusted partners, offering broad access to help in troubleshooting and sharing sensitive information about network configurations and growth plans.
But China operate under a different terrain. The Chinese government and political infrastructure requires that any successful Chinese company be intertwined with the Communist Party, and the party is integrated into the government and military infrastructure of the country.
This means that their first loyalty is to the China and its government, customer loyalty is secondary.
The implication of this loyalty structure is that network equipment buyers must be sure to engage in secure practices when working with all of their vendors. Network and security managers dealing with Chinese companies should consider the different attitudes and loyalties of these companies, and maintain a healthy distance when it comes to sensitive information and access controls.
In a statement to the Washington Post, Robert Strayer, the State Department’s says; “A country that uses data in the way China has – to surveil its citizens, to set up credit scores and to imprison more than 1 million people for their ethnic and religious background – should give us pause about the way that country might use data in the future,”. “It would be naive to think that country, [given] the influence it has over its companies, would act in ways that would treat our citizens better than it treats its own citizens.”
The CIA also issued a warning to intelligence officials that Huawei receives funding from China’s National Security Commission, the People’s Liberation Army and a third branch of the Chinese state intelligence network,
Huawei troubles with the U.S. began as far back as 2003, when the company was accused of stealing intellectual property from U.S.-based network hardware maker Cisco. The companies settled out of court, but Huawei has been accused of stealing other firms’ intellectual property and violating international economic sanctions.
In 2011, Vodafone discovered hidden backdoors in Huawei equipment, although Vodafone and Huawei said these vulnerabilities were addressed in 2011 and 2012.
2018 was a terrible year for the Chinese telecom giant as a flurry of activity signaled the level of concern in the international intelligence community. This mounted pressure on the company and other Chinese technology firms.
In February 2018, the FBI director, Chris Wray warned U.S. citizens not to use Huawei and ZTE phones, both are made by Chinese companies.
According to him, “the FBI was deeply concerned about the risks of allowing a company or entity that is beholden to foreign governments that don’t share our values to gain positions of power inside our telecommunications networks”.
“That position of power would allow Huawei or ZTE “the capacity to exert pressure or control over our telecommunications infrastructure, it provides the capacity to maliciously modify or steals information and provides the capacity to conduct undetected espionage.”
When the panel of the six heads of six U.S. intelligence agencies which include the CIA and Defence Intelligence Agency, were asked to raise their hand if they would recommend private citizens use a device from Huawei or ZTE, not one hand was raised.
In May of 2018, U.S. Pentagon banned the sale of Huawei and ZTE phones on US military bases worldwide, this was because the agency feared that Huawei and ZTE devices may pose an unacceptable risk to the Department’s personnel, information and mission.
On July 17, 2018, the intelligence chiefs of the U.S., Canada, the U.K., Australia and New Zealand reportedly met in person, in part to make plans to publicize their concerns about allowing Huawei equipment to operate in their countries and governments.
Two days later, the United Kingdom’s government-run lab found some shortcomings in Huawei hardware and software after evaluation. A week later, Australia announced a ban that affects the telecom. The country announced a ban on telecommunication companies “who are likely to be subject to extrajudicial directions from a foreign government” from supplying equipment for its nationwide 5G rollout. In late November 2018, New Zealand’s intelligence agency barred Huawei from participating in its 5G development, citing “significant national security risks.”
On the request on the U.S. government, Canadian police arrested the Huawei CFO, Meng Wanzhou, in December 2018, on allegation that she violated the international sanctions against Iran. Huawei allegedly broke U.S. sanctions last year by selling embargoed American equipment to Iran
This led to a diplomatic fallout between China and Canada and Canada paid the price with three of its citizens. China detained two Canadians former diplomat Michael Kovrig and businessman Michael Spavor in Chinese prison cells where the lights are on 24 hours a day and also sentenced 36-year-old Canadian Robert Lloyd Schellenberg to death.
If 2018 was a bad year for Huawei in terms of relationship between the telecom company and other countries, 2019 will be nothing but worse.
In January 2019, the US files criminal charges against Huawei, slamming it with two dozen allegations that include conspiring to evade US trade sanctions and steal trade secrets, and also formally seeking the extradition of Meng’s from Canada. One 10-count indictment accuses Huawei of stealing trade secrets from US carrier T-Mobile beginning in 2012. In mid-January 2019, the Polish government also arrested a Huawei employee on allegations of spying on the country for China.
On the 15th of May, President Donald Trump issued an executive order banning any electronic or digital technology that the Secretary of Commerce deems a national security threat. He also gave an executive order banning U.S. companies from supplying technology to Huawei, part of a long-running campaign against the company. The U.S. also put pressure on its allies not to adopt Huawei’s 5G equipment as US the gear could be used to spy for China.
this happening when Huawei announced it plan to roll out the 5G technology, the next generation of wireless teachnology.
The next generation of wireless technology is expected to fuel even more connectivity in the “internet of things,” as billions of devices will be involved, all communicating with each other, forming what could become a surveillance web over much of the planet, and exponentially expanding the number of potential targets for spying.
Huawei links to the Chinese government makes it untrusted and not secure around the world. No Chinese company is fully independent of its government, which reserves the right to require companies to assist with intelligence gathering.
CONSEQUENCES OF US BAN ON HUAWEI
Though Huawei smartphones is yet to make a breakthrough to the U.S. market, the networking equipment that will usher in the 5G technology is highly anticipated.
The addition of Huawei in the blacklist of companies restricted from doing any business in the U.S. with any U.S. company is a big blow to the telecom giant.
Smartphone vendors often enter business with telecommunication companies to pre-install popular apps such as Facebook, Twitter, Whatsapp and other apps into phones. All this apps come pre-installed on Huawei phones in many markets. Also Huawei uses the Google Android as its operating system. This is marketed by an American vendor, Alphabet Inc’s Google.
Few days after Washington executive order, Google withdrew Huawei android licence in compliance to the executive order. The company said it would no longer provide Android software for Huawei phones after a 90-day reprieve granted by the U.S. government expires in August. The company will continue to send updating software to existing Huawei phones, also services like Google’s Playstore and all Google apps will still be available for current models of Huawei phones including those which have not yet shipped or even been built.
If things are the way they are after the August deadline, Huawei phones will stop getting software updates no matter where you are.
It is interesting and also impressive to note that Huawi have been working on a backup to the Google Android operating system (OS) since 2012 and this has been a PLAN B for them in case of something of this nature come to play. This OS will be functional on all android phones.
This backup will be available later this fall or early next year, the founder revealed.
The challenge with this plan B is that if the company cannot do business with the U.S., then access to apps such as Instagram, Facebook, Netflix, Twitter, Whatsapp, and other popular apps is unattainable.
Huawei cannot keep on making laptops without Microsoft and Intel – this is a brutal hit to their company
Facebook has more than 2 billion users around the world and according to a recent buyer of Huawei, the phone no longer has a pre-installed facebook but buyers can still download the app from the Google Play store for now, but that option will go away if Google’s relationship with the Chinese company is severed.
Last year, Huawei spent $70 billion buying phone hardware, out of it, $11 billion went to U.S. vendors including Qualcomm, Intel and Micron Technology. With this ban, the company said it is looking for an alternative market outside the U.S.
Huawei has said it was prepared for the U.S. action since mid of 2018 and is said to have stockpiled enough chips and other vital components to keep its business running for at least three months. The company said it is also designing its own chip.
CONSEQUENCES OF THE BAN ON THE U.S.
Development of another alternative operating system to rival Google which dominates 80% of the market is not good for the American company. Also, restrictions of the apps could boomerang back on Google and Facebook, which are U.S. companies, that count on their apps being widely installed around the world.
Chipmakers and other companies in the U.S. will lose revenue when they cut off Huawei as a customer. But the tech industry is also poised to suffer in a more fundamental way. Huawei depends on many U.S. companies for components woven into the 5G equipment it makes. These U.S. tech enterprises will lose out on sales to Huawei.
The 5G technology will also be slowed down worldwide because of the sales of critical components is blocked by this ban.
Finally, if Huawei is able to come out intact in this ban, it will emerge even stronger and more innovative than it was before, having been forced to develop new technology in-house. This is very dangerous to the U.S. economy.
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