Huawei Responds to US Approval of $1.9 Billion Telecoms Replacement Plan

(Source: Shutterstock)
(Source: Shutterstock)

Reuters reported on Wednesday that the United States Federal Communications Commission (FCC) has authorized $1.895 billion in compensation funds to help domestic rural operators replace telecommunication network equipment of enterprises such as Huawei and ZTE. Huawei issued a strong response, claiming that the path chosen by US regulators will only cause economic losses to operators in remote areas of the country

According to FCC, the plan covers all communications equipment and services produced or provided by Huawei and ZTE, purchased before June 30 last year. In addition, the plan raises the upper limit on the number of users served by operators originally eligible to apply for subsidies from 2 million to 10 million. If the total value of reimbursement applied for by operators exceeds the planned amount, the funds will be preferentially used to subsidize operators with 2 million or less users. Relevant operators can apply for reimbursement from October 29.

Bloomberg said that this restriction order will mainly affect small operators providing services in rural areas of the United States.

For telecoms carriers, the difficulty is not to replace equipment, but to find cost-effective substitutes and recruit enough skilled workers. As early as February 2020, the FCC stated publicly that the reason why the US is “left behind” in the construction of its 5G network is an overall lack of skilled workers.

Huawei stressed in a statement that its equipment currently provides “high-level and high-quality services” to operators in rural or remote areas, and said that FCC rulings to dismantle normal equipment are simply “unrealistic,” causing operational interruptions for these enterprises.

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The FCC issued an official statement on June 30 last year, officially identifying Huawei and ZTE as “national security threats” thereby preventing American communications providers from using a government subsidy fund of $8.3 billion to purchase any of the firms’ equipment. Although both Chinese enterprises have filed requests for review of the declaration, they have so far been rejected by the FCC.

Huawei previously stated that the FCC had determined Huawei posed a national security threat without evidence, not only violating the due process principle of legislation, but also raising suspicions of breaking the law. The Chinese Ministry of Foreign Affairs has also repeatedly stated its opposition to what officials see as unfair actions by US regulators.

According to Chinese domestic media outlet Jin10, the latest report released by market research institutions Omdia and Dell’Oro shows that Huawei ranked first in the world in terms of overall telecoms equipment, 5G equipment shipments and revenue in the first quarter of 2021. Among all firms, Huawei accounts for 27% of the global telecoms equipment market