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Huawei and ZTE face further US bans with $1bn 'rip and replace' campaign

Huawei
(Image credit: Future)

The US Senate has approved $1 billion in funding for rural operators to remove equipment from Chinese firms Huawei and ZTE from their infrastructure.

The package had been put forward by the House Energy and Commerce Committee, which comprises both Republicans and Democrats, last year but the unanimous approval from the Senate means the legislation will now be sent to President Donald Trump to be signed off.

Chinese vendors have largely been excluded from the US market because of national security concerns, with major carriers opting to use radio equipment from Ericsson, Nokia and others.

Huawei USA

However a number of smaller providers use kit from Huawei and ZTE because it is relatively inexpensive. The Rural Wireless Association, which represents operators with fewer than 100,000 customers, estimates a quarter of its members have Chinese-made kit in their networks.

Huawei said the legislation was underfunded and would harm consumers and businesses – especially those in the underserved areas that these rural carriers serve.

“[The bill] does not address the most significant issues of network security, but sells out people and operators in rural areas at the expense of taxpayers,” said a Huawei spokesperson. “It also completely ignores the alternative proposals put forth by our rural customers which provide a more holistic approach and will increase the network security profile of all U.S. networks at a fraction of the cost outlined in the legislation.

“While the intention of this bill is to provide a robust and secure network for all Americans, if implemented the legislation passed yesterday will fall woefully short.”

Last year, Huawei and ZTE were effectively blacklisted by the US, preventing them from doing business with US suppliers. Huawei has frequently denied any allegations that its products are a security risk, while the US government has produced no evidence of any wrongdoing. Nonetheless, Washington is now urging allies to follow its lead and ban Huawei from their 5G deployments.

In the UK, operators had argued innovation would decrease and costs would rise if they were barred from Huawei’s 5G gear and it appears as though the government eventually decided there was no alternative.

Last month it was confirmed that Huawei equipment could be used in the radio layer of 5G networks but not in sensitive areas like the core – effectively preserving the status quo. However Huawei kit is subject to a 35 per cent cap.

Despite the ongoing hostility, Huawei is pushing ahead with its 5G strategy. Earlier this week it declared it believed it was 12-18 months ahead of the likes of Ericsson and Nokia and boasted that the number of 5G contracts it has won now stands at 91 – up from 65 in December. This figure includes 47 in Europe.