US-China Trade War: Can a Blacklisted Huawei Still Provide 5G Connectivity in Cambodia?

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Phnom Penh: Everything seemed fine for Huawei Technologies Co. Ltd. earlier this year. Huawei Technologies Cambodia Ltd. CEO David Li proudly announced at Digital Cambodia 2019 that Huawei was “the only industry vendor that can provide the intertwined 5G system. I believe this year 2019 will be a milestone year for 5G in Cambodia.” The Ministry of Posts and Telecommunications signed an agreement with the Chinese multinational tech giant to wire 5G infrastructure in the Kingdom and provide connectivity service next year.

“Cambodia will become the first country in ASEAN to develop 5G capabilities,” said Li Jin Ge, Huawei President of Asia Pacific Region.

How things have changed in just a matter of weeks.

As the US-China Trade War escalated this month, US President Donald Trump blacklisted Huawei and banned US companies from working with the company. Some economic analysts characterized the move to be tantamount to a “death penalty” for the Shenzhen-based tech giant.

The US ban will cut the tech company’s supply chain off from key US component suppliers and software–technology used for both 5G-related telecommunications infrastructure and smartphones. Nearly 20 percent of Huawei’s supply chain components come from US tech firms Qualcomm, Intel and Micron Technology that provide microchips used in 5G networks and modems.

The blacklist decision started a cascade of bad news for the Chinese firm this week from Google announcing that it will not be providing Android OS for Huawei handsets to Japan, Taiwan and Britain cancelling early orders of 5G-capable smartphones.

The reclusive founder of Huawei, Ren Zhengfei, was forced to appear on Chinese-state TV in the midst of talk that the company’s global 5G ambitions would be made irrelevant after Trump’s “death penalty” blacklisting.

“We sacrificed individuals and families for the sake of an ideal, to stand at the top of the world,” Ren said. “For this ideal, there will be conflict with the US sooner or later.”

 

“The U.S. government’s actions at the moment underestimate our capabilities,” added Ren. The founder also noted that the company “can’t be isolated” because it had a stockpile of 5G-related microchips and that no other parties would be able to catch up with the company in 5G technology in the next two to three years.

US tech firms will also be damaged if the US-China Trade War continues. US companies could lose up to $56.3 billion in export sales over five years due to tariffs and export bans on technologies involving Huawei and the like, according to a report by the Information Technology & Innovation Foundation. .

Nearly 82 percent of Cambodians use the internet and about 7 million use Facebook. The number of mobile smartphone users reached 19.5 million in January 2019, according to official figures.

Alongside the memorandum of understanding signed with Huawei to work with state-owned Telecom Cambodia to develop 5G infrastructure, Royal Group-owned Cellcard has also announced plans to develop 5G technology. Cellcard CEO Ian Watson told the Nikkei Asian Review that the first stage of the 5G rollout would start next month and include 1,000 5G base stations in Phnom Penh, Siem Reap and Sihanoukville. Malaysian-owned Smart Axiata and Vietnamese-owned Metfone also announced plans for 5G testing this year.

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