Huawei SA says local users unaffected by US ban

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South African owners of Huawei handsets can expect “business as usual”.
South African owners of Huawei handsets can expect “business as usual”.

Huawei South Africa says it’s “business as usual” for the company and its customers despite the global fallout after the US put the telecoms equipment maker on a trade blacklist last week.

“Huawei has been working for some time now to mitigate the impact of the US ban; this includes our South African operations. We have diversified our global supply chain as part of our business continuity management processes,” the group said in an e-mailed statement to ITWeb.

“In South Africa, we will continue to serve all our customers and partners with the same focus and dedication as before, and contribute to the ICT sector with vigour, as the fourth industrial revolution is a key economic focus for growth and social development.”

When it comes to consumer support, Huawei says it will continue to provide security updates and after-sales services to all existing Huawei and Honor smartphone and tablet products, covering those that have been sold and those that are still in stock globally.

“The devices in people’s hands are completely unaffected by what’s happening in the US. For owners of Huawei handsets in South Africa, it will be business as usual,” Huawei VP of corporate communications Glenn Schloss said in an interview with CNBC Africa.

“We remain positive, but we are preparing for various eventualities. We are stockpiling components and have been working with our supply-chain partners for some time,” Schloss added.

This after Google said it would suspend some of its business with Huawei in order to comply with Washington's trade restrictions, which make it very difficult for US companies to do business with the Chinese vendor.

Reuters originally broke the story that Huawei would immediately lose access to updates to Google's Android operating system, and future versions of Huawei smartphones, which run on Android, would also lose access to popular services, including the Google Play Store and the Gmail and YouTube apps.

However, users with current Huawei smartphones that have Google apps will continue to be able to use and download app updates provided by Google.

Huawei is the world’s second-largest smartphone seller and the largest telecoms gear-maker globally.

The United States has for months been rallying its allies to cut Huawei out of planned 5G networks, citing "national security threats" due to the company’s close ties to the Chinese government. Huawei has denied installing any backdoors in its networking equipment for alleged government spying.

Following the US, Japan has excluded Huawei from public procurement, and Australia and New Zealand have effectively blocked Huawei from involvement in the rollout of their 5G network infrastructure. Huawei, however, says the leaders of Britain, Germany, France, Belgium and the Netherlands have indicated their governments will not follow suit to ban Huawei from involvement in their networks.

Huawei founder and CEO Ren Zhengfei.
Huawei founder and CEO Ren Zhengfei.

Trade wars continue

Last week, US president Donald Trump upped the ante in his battle with Huawei, issuing an executive order declaring a national emergency over ICT threats. The US Department of Commerce then officially placed Huawei and 70 of its affiliates on the Bureau of Industry and Security's "entity list", effectively banning the company from buying components from US companies without government approval.

This new commerce ban does not stop US companies from buying Huawei gear, but instead bans Huawei from obtaining its supply chain components from US companies. This could be a big problem for the Chinese firm, which relies on US companies for components for its gear.

This week, however, the Trump administration softened its stance slightly by granting the firm a licence to buy US goods until 19 August, to minimise disruption for customers.

China is not taking the attack on Huawei lying down. Chinese commerce ministry spokesperson Gao Feng reportedly told a weekly briefing that the US needs to “show sincerity and correct their wrong actions” if it wants trade talks with China to continue.

In an interview with Chinese media this week, Huawei founder and CEO Ren Zhengfei said the company “will certainly be able to continue serving our customers”.

“Our production capacity is huge, and adding Huawei to the entity list won't have a huge impact on us. We are making progress in bidding worldwide.

“In the first quarter of this year, our revenue grew 39% over the same period last year. This rate decreased to 25% in April, and may continue decreasing towards the end of this year. But the US ban will not lead to negative growth, or harm the development of our industry,” Zhengfei said.

Supply chain struggle

The blacklisting of Huawei has sent a ripple through global supply chains and pummelled technology shares.

Japanese tech giant Panasonic was the latest to join a growing list of global companies disengaging from Huawei, saying yesterday it had stopped shipments of some components.

A day earlier, British chip designer ARM said it had halted relations with Huawei, to comply with the US ban. Reuters reported this could potentially cripple Huawei’s ability to make new chips for its smartphones as it uses ARM blueprints to design the processors that power its smartphones.

Some US chipmakers have also been forced to freeze the supply of critical software and components to Huawei, to comply with the US clampdown. According to Bloomberg, chipmakers including Intel, Qualcomm, Xilinx and Broadcom have all told their employees they will not supply Huawei until further notice.
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