US tasked to buy stakes in Nokia, Ericsson to battle Huawei

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The tenuous relationship between the United States and the Chinese telecommunication giant, Huawei is about to take a new turn. The country has been told to buy controlling stakes in European companies, Nokia and Ericsson to compete with Huawei.

The US Attorney General, Bill Barr, gave the advice because the US has been making efforts to fight Huawei’s dominance of the 5G market. Barr said that Nokia and Ericsson were the only companies that could compete with Huawei internationally.

Also, since the US officials have urged allies not to use Huawei’s equipment in their 5G networks but with limited success, there is no US company that makes the radio access equipment needed for telecoms networks. This is the more reason why Nokia and Ericsson are the closest of Huawei’s rivals.

“There are only two companies that can compete with Huawei right now: Nokia and Ericsson. The main concern about these suppliers is that they have neither Huawei’s scale nor the backing of a powerful country with a large embedded market like China.

“Putting our large market and financial muscle behind one or both of these firms would make it a far more formidable competitor and eliminate concerns over its staying power,” he said.

Meanwhile, the attorney, in his speech at a conference on China’s security threat, that held in Washington, described Huawei as a threat that could give Beijing unprecedented leverage over US and Western industry and security.

The fear of the US is that if China continues to dominate the 5G Communications market, the industrial internet would become dependent upon Chinese technology and China would have the ability to shut countries off from technology and equipment upon which their consumers and industries depend on.

What you should know: The United States and China have been embroiled in a bitter trade war for quite a while now and Huawei has been stuck in the middle of it. Huawei was said to have posed a security threat to the United States as it allegedly works on behalf of the Chinese government, according to a report published by the US House Intelligence Committee.

Huawei says it operates independently of the Chinese government but the US has long suspected the company of spying on the networks its technology operates. Huawei has repeatedly denied allegations of spying, however, the US has passed over Huawei for broadband and wireless contracts, and the Trump administration has tried to pressure countries to stop buying telecommunications equipment from Huawei.

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