Huawei wants to sell access to 5G patents to create a competitor
Huawei might hope allowing a competitor to modify its source code will ease security fears about its 5G technology
Ren Zhengfei, the billionaire founder and chief executive of Huawei Technologies, said he is ready to share its 5G technology with potential Western buyers.
Ren said Huawei is willing to give buyers perpetual access to Huawei’s existing 5G patents, licences, code, technical blueprints and production know-how for a one-time fee, according to a two-hour interview with The Economist on September 10, the contents of which were confirmed by Huawei.
The acquirer would be allowed to modify the source code, meaning that neither Huawei nor the Chinese government would even have hypothetical control of any telecoms infrastructure built using equipment produced by the new company. Huawei would likewise be free to develop its technology in whatever direction it pleases.
The comments from Ren come as the Chinese telecoms giant remains mired in the middle of the US-China trade war and after it was put on a US trade blacklist in May on national security grounds. This has curtailed its attempts to roll out its next generation 5G network technology across the globe, with the US alleging that its equipment could be used for espionage activity by China’s intelligence agencies.
According to the interview, Ren’s stated aim is to create a rival that could compete in 5G with Huawei (which would keep its existing contracts and continue to sell its own 5G kit). To his mind, this would help level the playing field at a time when many in the West have grown alarmed at the prospect of a Chinese company supplying the gear for most of the world’s new mobile-phone networks.
“A balanced distribution of interests is conducive to Huawei’s survival,” Ren says in the interview.
Despite Washington’s recent decision to grant it a further reprieve to buy major components from American hi-tech companies, the company may delay overseas sales of its upcoming 5G Mate 30 series smartphones for lack of access to Google services under the US ban, according to a report by the Post last month, citing sources.
Ren said in the interview that Google has been lobbying the Trump administration to allow it to resume supplying Huawei.
The US Commerce Department has received more than 130 applications from companies for licences to sell US goods to Huawei, according to a Reuters report last month, citing sources. The Trump administration, however, has not yet granted any such licence in the two months since the latest Huawei reprieve was announced.
Despite these challenges, the Shenzhen-based company saw its global share of telecoms equipment expand to 28.1% in the first half of this year, and it also remains ahead in the 5G gear market with 50 announced commercial 5G mobile network deals. Analysts however, have warned about the future impact of the US trade ban on Huawei’s overseas business in particular.
Australia banned Huawei from supplying equipment for its 5G network earlier this year, citing national security risks and Huawei’s business in Europe is also under threat, where it has an estimated 30% share of the market.
The US has been lobbying European countries to block the company’s equipment, citing national security concerns that Huawei has strenuously and repeatedly denied.