What you need to know
- After crippling Huawei's smartphone business, the U.S. government wants to do the same to its telecoms equipment enterprise.
- A.G. Barr has suggested propping up rivals like Nokia and Ericsson by buying stakes in them through private equity firms.
- The move could also help U.S. carriers speed up their 5G adoption.
Aside from making smartphones, Huawei also makes components for cell towers and supplies this to much of the world. This has become doubly important with the rise of 5G. Huawei is one of the only companies which has the technology to enable 5G proliferation, a point the U.K. and the EU took into account recently when considering whether to allow Huawei into their networks or not.
U.S. Attorney General Barr, not quite satisfied with the outcome on the other side of the pond, has engaged with White House officials on other ways to neuter Huawei and push them out of the global telecoms equipment market.
One such idea was funding Huawei's competitors in the telecoms market like Nokia and Ericsson, both of whom are also working on 5G technology.
As per the WSJ, Mr. Barr was quoted as saying:
Some propose that these concerns could be met by the United States aligning itself with Nokia and/or Ericsson through American ownership of a controlling stake, either directly or through a consortium of private American and allied companies. Putting our large market and financial muscle behind one or both of these firms would make it a more formidable competitor and eliminate concerns over its staying power.
Huawei has been embroiled in a sticky trade war with the U.S. Government for a while. Last year, the country escalated the feud and banned the telecommunications firm from dealing with any U.S. agencies, neutering is the capability to produce Android smartphones and Windows laptops. With this proposed move, the U.S. wants to cripple Huawei's other business.
As of now, this is merely a suggestion. But should it become more than that, Huawei may actually be in more trouble than it can feasibly withstand.