WASHINGTON (Reuters) – Black-listed Chinese telecommunications equipment giant Huawei is in early talks with some US telecom companies about licensing their 5G network technology to them, a Huawei leader told Reuters on Friday.
FILE PHOTO: A Huawei company logo appears at Shenzhen International Airport in Shenzhen, Guangdong Province, China July 22, 2019. REUTERS / Aly Song / File Photo
Vincent Pang, senior vice president and board member, said that some companies had expressed interest in both a long-term business or a one-time transfer, and declined to name or quantify the companies.
"There are some companies talking to us, but it would take a long journey to really finish everything," Pang explained during a visit to Washington this week. "They have shown interest," he added, saying conversations are only a few weeks old and not on a detailed level yet.
The US government, fearing that Huawei equipment could be used to spy on customers, has led a campaign to convince allies to block it from their 5G network. Huawei has repeatedly denied the claim.
There are currently no US 5G suppliers and European rivals Ericsson ( ERICb.ST ) and Nokia ( NOKIA.HE ) in general more expensive.
In May, Huawei, the world's largest telecommunications equipment supplier, was placed on a US blacklist for national security concerns and banned it from purchasing American-made parts without a special license.
Washington has also brought criminal charges against the company, alleged bank fraud, violations of US sanctions against Iran and theft of business secrets, which Huawei denies.
Rules that would be issued by the Department of Commerce earlier this month are expected to effectively ban the company from the US telecommunications chain.
The idea of a one-time fee in exchange for access to Huawi's 5G patent, licenses, code and knowledge was first conveyed by CEO and founder Ren Zhengfei in interviews with the New York Times and Economist last month. But it wasn't previously clear if there was any interest from US companies.
In an interview with Reuters last month, a foreign ministry official expressed skepticism about Ren's offer.
"It's just not realistic for carriers to take on this equipment and then handle all the software and hardware themselves," the person said. "If there are software errors built into the original software, there would be no way to necessarily say they are there and they can be activated at any time, even if the software code is handed over to the mobile operators," the official added.
For his part, Pang declined to predict whether any deal could be signed. However, he warned that the investment in research and development required by continuously improving the platform after a single transfer from Huawei would be very costly for the companies.
Huawei has spent billions to develop its 5G technology since 2009.
Further reporting by Ken Li and Karen Friefeld; Editing by Chris Sanders and Sandra Maler