What you need to know
- Huawei assures Canadian carriers it can still provide proper network infrastructure to other companies.
- The Chinese company claims to have 10-month stockpile of components, with plan to transition to other vendors.
- Canada's second- and third-largest carriers rely extensively on Huawei components for their networks.
As Huawei fights through complications of the U.S. trade ban on doing business with American companies, the Chinese company is working to reassure Canadian carriers that it can still provide the network components that carriers now rely on for building and maintaining their wireless networks. While the U.S. trade ban on Huawei doesn't directly affect its ability to do business with Canadian companies, Huawei makes use of components and technology from U.S. companies for its end products.
As a hedge, Huawei is telling Canadian carriers that it has a 10-month stockpile of such components from U.S. companies, which will give it enough runway to execute plans to shift to different vendors as necessary. The U.S. Commerce Department has also granted Huawei a limited license to operate with U.S. companies through August 19, which further softens the blow of the transition period.
Alykhan Velshi, vice-president of corporate affairs at Huawei Canada, provided a concise and committal statement to The Globe and Mail:
We have already developed a solution for replacing American chip and component suppliers with suppliers from other countries, so that we can fulfill all contracts signed with our global customers and meet future demand. We have built up a stock of spare parts used for maintaining live network equipment worldwide for the next five to six years to ensure operational continuity of equipment already used in our customers' networks, including in Canada.
BCE Inc and Telus Corp, the second- and third-largest wireless carriers in Canada, both extensively use Huawei radio equipment. A shortage or gap in component availability could cause problems for both network maintenance and expansion, particularly as carriers look forward to 5G rollouts. It isn't yet clear what changes in the end quality of the network equipment, if any, will be present when Huawei has to switch suppliers and technologies. At the very least, it will require significant work on Huawei's end to work around the U.S. restrictions as it attempts to fulfill ongoing contracts with carriers around the world.