Chinese technological giant Huawei is making inroads into South Asia as the company faces setbacks in North America, Europe, and Australia. Huawei is in the process of offering fifth-generation (5G) wireless network services to the region, which is home to a quarter of the world’s population.
The Shenzhen-based firm has plans to build the required infrastructure for 5G internet in India, Pakistan, Sri Lanka, and Bangladesh. But before Huawei can realize its expansion plans, it must negotiate several challenges—chief among them: concerns about the cyber-security of proposed 5G networks.
Already, the United States has blacklisted Huawei after U.S. President Donald Trump publicly voiced concerns about the ties the company has to the Chinese military while accusing the tech giant of intellectual property theft as well. Huawei faces a global fallout from the U.S. decision, with projects in Europe and Australia on the line in the aftermath.
What Does Huawei Bring To South Asia?
5G data speeds are tens of times faster than the previous fourth-generation (4G) of technology. 5G networks also have lower latencies (or signal lag) and allow more users to connect to nearby cellular towers at the same time, expanding overall reach.
According to CNET, the true potential of 5G lies in the dramatic improvements it offers to driverless cars, telemedicine, and virtual reality gear, apart from improved usage in smartphones, laptops and streaming devices.
Huawei is a global leader in 5G technology, with the firm offering better equipment at cheaper prices than international competitors. The South China Morning Post reports that the company recently performed better than rivals Nokia and Ericsson in a 5G trial.
Besides dominating the much sought-after Chinese market, the technological leaps made by the company in recent years have also made it possible for Huawei to successfully market itself to European nations, further boosting company credibility.
South Asia is home to a quarter of the world population, and mobile internet penetration in the area is expected to rise to 61% in the next few years. This represents a very lucrative opportunity for the company to increase business and boost profits.
What Challenges Might Huawei Face in South Asia?
According to Nikkei Asia Review, India, Pakistan, and Sri Lanka want to roll out commercial 5G services by the second half of 2020, while Bangladesh plans on launching the high-speed networks by 2021. However, each country presents a specific set of problems the Chinese firm will have to negotiate before it can strike 5G deals.
In India, there is some concern about the perceived ties Huawei has to the Chinese military, and whether those ties might potentially translate into the company actively spying in India on behalf of the government in China. There is also policy ambiguity in the Indian government regarding the involvement of Huawei in 5G trials.
For Huawei, Pakistan Provides a Model to Replicate in Other Countries
In Pakistan, Huawei faces a far friendlier environment. The two countries are working on many mega-projects under the China-Pakistan Economic Corridor agreement. The commercial offerings of Huawei and other Chinese companies have a strong presence in the Pakistani market. For example, China Mobile launched its first overseas brand in Pakistan, known as Zong, in 2008. It is presently the country’s third-largest mobile phone service provider. A senior Pakistani minister has also already said that Huawei will be launching 5G in Pakistan.
Besides 5G, Huawei has plans to connect the Pakistani ports of Gwadar and Karachi to posts in the African nation of Kenya, reports Nikkei Asia Review. The deal to lay undersea cables seems to be part of a larger Huawei idea to build a network of optic fiber and wireless networks in the country at a comparatively cheap cost. An overland optic fiber cable has already been laid down between the border city of Khunjerab through Pakistan’s Gilgit-Baltistan region to Rawalpindi. Huawei likely aims to replicate this model elsewhere.
Huawei is Betting Big on the Developing World
Huawei has similarly positive expectations in Bangladesh and Sri Lanka. Senior officials in both countries have praised their previous relationship with the technological giant, and have dismissed security concerns categorically.
The Chinese firm has estimated that 5G technology will bring industry opportunities worth $1.2 trillion to south and southeast Asia in the next few years. With the company declaring revenues in excess of $100 billion in 2018, this presents a truly remarkable opportunity for Huawei to become possibly the biggest tech firm in the world.
As the global rollout of 5G begins in more advanced countries, the road ahead for Huawei is also connected to global power games over digital infrastructure, as the moves of the Trump administration seem to suggest. How Huawei reacts to the challenges and hurdles that obstruct the path of the company to global dominance will likely play a key role in the larger trade war between the U.S. and China.