MUMBAI/ISLAMABAD – Huawei is urging cash-strapped South Asian nations, including Pakistan to adopt its low-cost 5G technology as the tech group moves to fend off U.S. claims that it serves as a proxy for Chinese spying.
Already well positioned in Pakistan, Bangladesh and Sri Lanka, Huawei Technologies is intensifying efforts to allay India’s concerns over the company’s perceived ties to the Chinese army before trials of fifth-generation wireless technology start there later this year.
“‘Go digital, not political,’ is a choice that serves the interests of all stakeholders,” a spokesman for Huawei Southeast Asia told Nikkei Asian Review. “We will try our best to complete the trial for customers, and work together with industry partners to push forward the 5G ecosystem.”
Pakistan and Sri Lanka aim for the commercial deployment of 5G services in the second half of next year, with Bangladesh more likely to launch its 5G network in 2021.
The region – home to one-quarter of the world’s population, with mobile internet penetration forecast to rise to around 61% by 2025 – represents a potential gold mine for 5G equipment makers such as Huawei. The Chinese company last week reported soaring revenues of $105 billion for 2018.
Still, U.S. pressure on allied countries to bar Huawei from their 5G networks has begun to affect the company. Its carrier business declined 1.3% last year, and this week Britain’s IHS Markit said Huawei had fallen behind Sweden’s Ericsson as the world’s largest telecom equipment maker.
Mustafa Jabbar, Bangladesh’s information technology minister, praised Huawei’s role in his country’s telecom infrastructure at the MWC Barcelona expo in February. Ajith Perera, Sri Lanka’s minister of digital infrastructure, said he had no concerns about using Chinese technology, and that Huawei’s solutions and equipment already are used by 70% of Sri Lankans.
“Business and politics are two different things,” Perera told the Colombo Gazette last month. “Sri Lanka has successfully and safely been using Chinese products including Huawei in a big way.”
Close links between Beijing and Islamabad are also expected to boost Huawei’s 5G ambitions in Pakistan, a country that has already benefited from investment worth tens of billions of dollars under China’s flagship Belt and Road Initiative.
“Huawei has already established a strong presence in the Pakistani market,” a senior Pakistan Telecommunications Authority official told Nikkei. “This should give them an edge.”
Huawei estimates that 5G will bring industry opportunities worth $1.2 trillion to South Asia and Southeast Asia over the next five years.
“The number of 5G subscribers will top 80 million, internet traffic will grow by five times in total, more than 20 smart cities are on the way, and wireless, digital and intelligent equipment will improve social productivity by 4% to 8% on average,’’ Huawei told Nikkei.
Shrugging off U.S. accusations that it spies on behalf of China, Huawei urged countries across the region to cooperate with equipment vendors that showed true local commitment.
“In the past decades, Huawei has carried out extensive and intensive cooperation with governments and operators, and we keep bringing innovative, leading, secure and reliable products to all countries and help them build the most advanced and secure connection services,” Huawei said.
One difficulty for many telecom providers across South Asia will be keeping prices low enough to ensure adequate consumer adoption rates.
“Attractive tariffs for 5G users will be the key to encouraging a large number of customers,” said Mohammad Suhail, head of the Karachi-based Topline Securities Investors’ Advisory.
Charges for data services in Pakistan were higher than in many other developing economies, Suhail said, with equipment outlays and the high prices for 5G spectrum expected to add to cost pressures.