The trade war between the United States and China has plunged Huawei into an unprecedented crisis after President Trump blocked the Chinese telecom giant from operating in the United States and denied it access to American technology.
The Trump administration said it acted over concerns first raised by the intelligence community that the Chinese government will order Huawei and other Chinese telecoms during a conflict to shutter their wireless networks.
The Americans believe China’s growing domination of U.S. switching systems and undersea cables that carry data will over time present a huge vulnerability.
Huawei is the world leader in developing next-generation 5G networks, mainly in Europe and Asia. It’s not building a 5G network in the United States, but its telecom gear is used by many rural American wireless companies.
As a result of Trump’s executive order, Google, Corning, the British semiconductor giant ARM and other players in Europe and Asia last week suspended their partnerships with the Chinese telecom gear maker. Google’s announcement cut off Android support to phones made by Huawei, meaning that Google will not support its new Android phones or its YouTube and Google Maps apps that drive Huawei phone sales in Europe and Asia.
Microsoft and other technology giants are keeping quiet for now, apparently walking a tightrope between waiting to do business with Huawei elsewhere in the world and keeping Donald Trump happy – a nearly impossible task.
After Google’s announcement shook global stock markets, the Commerce Department suspended the ban for 90 days to give corporations time to plan their strategies.
The big question for the American companies that use Huawei hardware in their VoIP infrastructure is… what’s next? Many are biding their time before settling on an answer.
Serious in VoIP Market
Huawei is a major player in the global Voice over Internet Protocol (VoIP) hardware market and represents about 25% of total sales revenue for VoIP and accompanying equipment globally, according to data from IHS MarkitOpens a new window .
It’s followed by Sweden’s Ericsson with 21%. China’s ZTE — another firm facing a U.S. ban — takes another 12%.
Thousands of  VoIP systems in the United States use Huawei parts.
Outside the United States, allied governments in Europe and Asia have been slow to follow Washington’s lead. Only Australia has banned HuaweiOpens a new window  from building new 5G networks, according to the New York Times adding that Japan has effectively done the same while Britain is hedging and Germany is offering diplomatic resistance because of its auto industry’s deep links to the Chinese market.
Some analysts say that the U.S. ban would give coverOpens a new window to governments and companies hesitant to defy China.
Huawei’s top executives have consistently denied Washington’s charges, insisting the company acts independently of Beijing and that the charges amount to fear-mongering. U.S. officials counter that Chinese law requires companies chartered in China to obey Beijing’s orders.
“We only provide technologies to support data processing and transmission and we do not own the data,†says David Wang, Huawei’s executive director. “Some have confused this technical issue as an ideological issue, and labeling a country or a company a national security risk will not help tackle the global network security challenge.â€
After the administration announced the Huawei ban, the company opened a new storage and database infrastructure offering  — competing against IBM, Amazon and Oracle — and reassured clients and governments that their data was safe and secure.
FCC turns up the heat on Chinese Telecoms
Last month, Brendan Carr, a Republican commissioner with the FCCOpens a new window called for a further investigation, this time into the activities of two other Chinese telecoms, China Unicorn and China Telecom, which he said posed a security threat to the United States. He accused them of hijacking US telecoms traffic and re-routing it through China.
For users of Huawei VoIP units and services, the ban carries serious implications, and companies and service providers are considering how they can continue to maintain these networks amid the trade war.
Rather than undertake an expensive replacement process, it may be cheaper and more prudent to take a wait-and-see approach and assess where the governments’ trade talks lead, due to resume later this month.
Key takeaways:
- Washington’s ban on Chinese telecommunications provider Huawei has serious implications for American firms already using its VoIP equipment.
- This represents literally thousands American companies that may have installed devices from the leading global manufacturer.
- While the Trump administration and the FCC are both turning up the heat on Huawei and other Chinese telecommunications firms, it’s obvious that some big American firms are taking a quiet wait-and-see approach.
- Replacement of the equipment that underpins a VoIP system can be an expensive process, and the Huawei issues may go away if the US and China can clinch a trade deal in the next few months.