How Putin dealt the death blow to Huawei’s big plans for Europe

“Huawei gives up on Europe.”

An article that the European branch of “Politico” published on its website on Thursday evening begins with this spectacular sentence. The reason for this has little to do with the company’s economic potential and much to do with politics, they say. And specifically:

watson summarizes the main points.

What happened?

Huawei’s predicament was summed up by company founder Ren Zhengfei in a speech to executives at the company’s Shenzhen headquarters in July this year, according to the Politico report, which sheds light on the increasingly difficult situation of the company.

updated: On the night of Saturday, it was announced that the US will ban the import and sale of Huawei smartphones and other Chinese hardware. These devices posed an unacceptable threat to national security.

«Politico» leads three causes of Huawei’s crisis On:

Over the past year, the Chinese tech group has pushed its Western lobbyists out of the company, scaled back its operations in Europe and put its goal of global leadership on hold, Politico said.

Probable reason for the change:

The reason was the case of alleged industrial espionage, which affected the 50-year-old daughter of the Huawei founder. As the heir presumptive to the company’s management, Meng had played a key role in the legal and PR battle between Huawei and Washington, according to “Politico”.

A virus also had a major impact. Before the pandemic, Huawei regularly hosted European politicians, journalists and business leaders at its headquarters in Shenzhen, Politico recalls. However, China’s zero Covid policy has made this impossible.

For many in Europe, the risk-reward calculation regarding Huawei changed overnight when Russian despot Putin and his troops invaded Ukraine.

What’s next?

The “Politico” reporters state in their report that Huawei’s strategic withdrawal is remarkable. The company has been investing millions of euros in lobbyists for years to gain a foothold in Europe.

The company is known for its lavish gift bags, often containing a Huawei phone, and lavish parties in glamorous venues with fancy buffets and dance performances.

But that seems to be the end of it.

The group now bundles its European activities into just one business area (instead of the previous two) with its headquarters in Düsseldorf and brings “under control” its lobbying activities in Berlin, Paris, Brussels and London.

According to “Politico”, these plans were still unannounced. The restructuring will help Huawei achieve greater synergy between its European operations, a spokesman for Europe said. The company’s workforce, currently around 12,000, will remain largely “stable.”

At the beginning of 2021, Huawei’s Brussels lobbyists were still optimistic that “Europe’s hunger for a cheap and fast 5G installation would triumph over security concerns,” notes Politico.

Today, the Chinese have dropped to third place in 5G equipment for European mobile network operators, well behind Ericsson and Nokia. And the long-term future looks bleak, the reporters warn.

However, according to industry analysts, the company still has a solid share in a number of large national markets, including Germany and Spain.

And Switzerland?

At first glance, the dependence of the Swiss telecom industry on Huawei does not seem to be a cause for concern, according to the NZZ last September. Swisscom mainly uses Ericsson technology for mobile communication and Huawei products are only occasionally used in this area, for example for antennas.

This looks different with the line-bound fixed network; Huawei hardware “plays an important role here”, but not for the main network components. When it comes to the actual “backbone” of this infrastructure, Swisscom switched from Huawei to Finnish manufacturer Nokia.

On the other hand, Swisscom competitors Salt and especially Sunrise rely on the Chinese for 5G mobile communications. According to experts, it is difficult to predict how “a sudden stop in the supply and maintenance of Huawei components” will affect communication networks.

As a reminder, the Swiss Social Democratic Party (SP) wants to create a “Lex Huawei” with an initiative launched in the spring: “The Federal Council must create a legal basis to protect critical communications infrastructure from being influenced by other states.”

Incidentally, the reason for the NZZ report was an “extremely Huawei-friendly book” or an anthology in which various authors express their opinions. Publisher: Former Director of the Federal Office of Communications (Ofkom) and current Chairman of the Salt Board.

It is not publicly known how the Huawei lobby in Switzerland will continue after its European headquarters scaled back efforts in the EU.

watson has asked Huawei to comment on the “Politico” report and asked how Huawei Switzerland is doing. Media response:

Sources