BERLIN, GERMANY – JANUARY 15: A Woman holding a mobile device with a Huawei logo is seen in this photo illustration on January 15, 2019.(Photo by Xander Heinl/Photothek via Getty Images)

To understand the depth of impact Huawei has had on Information, Communication and Technology (ICT) on the African continent, its worth considering the major investment it has made into this sector.

In January 2018, during the CES 2018 in Las Vegas, amidst a myriad of product launches and reviews, a story emerged, which at that time was not well publicized in mainstream Western Media. This story centered around the US President of Huawei’s consumer business, Richard Yu, lamenting the fact that Huawei was unable to successfully forge an agreement with US Mobile operators, to launch its devices.

Mr Yu’s statements form the backdrop of a complex tapestry, where according to some media reports, lawmakers in the United States Congress have exerted pressure on mobile operators to not do business with the Chinese telecommunications giant. As such, Huawei smartphones are not obtainable from any major US mobile operator.

The reasoning behind this shutout of Huawei from the US market can be read in two complex, but entirely different ways.

In 2012, the United States Congress House Intelligence Committee informed the US government that Huawei was a ‘National Security Threat’. However, no evidence of this claims have been made public. Irrespective, this report has been used as the foundation for the negative sentiment towards Huawei.

Nevertheless, one interpretation for the shut-out of Huawei from forming any meaningful partnership with US mobile operators, has been this report which cites it as a ‘National Security Threat’.

The other, less popular view (and one which receives little coverage in mainstream Western Media) is centred around Huawei’s growth and expansion.

While the brand is familiar to many from its mobile phone handsets, Huawei is developing technology in an array of other areas, which ranges from cloud services and artificial intelligence to 5G technology.

And despite increasing controversy around whether using Huawei telecommunications equipment poses a security risk, the shut-out on its business in some countries, and most recently, the arrest in Canada of one of its most senior executives, the company itself has continued on its steady path of global growth.

In 2018, Huawei replaced Apple as the world’s second largest smartphone seller in the June quarter, data from market research firms indicated. As such, many have attributed the shut-out of Huawei from US markets, as a deliberate attempt to maintain Apple’s superiority, both internally and externally.

Many analysts have characterized the shut-out of Huawei, as an attempt by the US to regain market share from a developing world competitor that has managed to make quality technology, for cheaper.

Irrespective of motive, it is evident that the US has been canvassing its allies to cease doing business with Huawei, particularly as it pertains to Huawei’s international roll-out of 5G equipment. This canvassing has been partially successful.

In France, the Orange has ruled out using Huawei products in its core 5G network, and Deutsche Telekom in Germany has announced that it’s reviewing purchases of Huawei equipment.

The government of Taiwan has also banned Huawei products, citing concerns that the tech giant could build back-doors into its products on behalf of the Chinese government.

This follows Australia’s assertion that it would ban the country’s carriers from buying equipment for 5G networks from Huawei and other Chinese telecommunications companies.

A number of other countries including the UK, Canada, the Czech Republic, Norway, and Japan are all in the process of evealuating their relationships with Huawei.

In a clear attempt at intensifying the onslaught against Huawei, US prosecutors have launched an investigation into allegations that Huawei stole intellectual property from US companies.

Despite not providing any evidence that Huawei has built back-doors into its products, U.S. officials have warned that allowing the company to be involved in the buildING of 5G networks poses unimaginable security risks particularly because of the relationship between the Chinese Communist Party and Chinese technology companies.

These allegations have emerged amidst acclivitous tensions between the US and China over trade, intellectual property, and geopolitics.

History repeating itself – ZTE and Iran

Whilst some of the telecommunications giants challenges arise from countries deciding not to do business with it, it is the allegation that it was selling equipment to Iran, which adds another complex layer to the tapestry of negative sentiment in mainstream Western Media.

This sparked the arrest of Meng Wanzhou, Huawei’s CFO, in Canada.

The United States has walked this path before. In 2017, Chinese telecommunications company, ZTE, declared that it would stall its operations after the United States’Department of Commerce banned companies from doing business with ZTE, specifically because of its sales to Iran.

The US decided to drop the ban, but ZTE had to agree to a number of penalties, including paying a $900 million fine (in addition to an earlier $1 billion fine), replace its entire board and senior leadership, and allow a team of US “compliance coordinators” to monitor its compliance with US trade laws.

However, the United States seems to be taking a tougher stance against Huawei, as no ZTE executives were arrested, despite the United States having ample opportunity to do so.

Moreover, many have rightfully questioned the United States unilateral actions against Huawei, especially because it was binding Chinese companies to its decisions on sanctions against Iran, which the Chinese government does not agree with.

Huawei in Africa

Twenty years ago, Huawei kicked off its operations in Sub-Saharan African, when its established operations in Kenya. Since its entry into the market in 1998, Huawei now has a footprint in more than 40 African countries, and is considered among the top three telecommunications companies on the continent.

In Africa, Huawei has been able to achieve what few other Chinese brands have. It has been able to shake off the negative perceptions (and stereotypes) of Chinese business on the continent.

Its strong reputation, built over 20 years, and deep penetration into African countries can be seen as a result of three core strategies which guided its business practices in the region:

  1. Strategic Pricing
  2. Relationship building across an array of stakeholders
  3. Hiring of local staff

To understand the depth of impact Huawei has had on Information, Communication and Technology (ICT) on the African continent, its worth considering the major investment it has made into this sector.

CSR Investment

Since it kicked off operations on the African continent 20 years ago, this telecommunications company has contributed to changes which has fundamentally altered the way people connect and entertain.

Huawei has indicated that it is committed to innovating around consumer needs, and assisting countries in the realization of their national development strategies. This commitment, both through products and long term programmes, has solidified a loyalty both on a government and consumer level.

This was further highlighted 2018, when former South African Telecommunications Minister Siyabonga Cwele presented Huawei with an Award of Excellence for their outstanding contribution to the ICT sector in South Africa.

Through their partnerships with local network providers and government, they have boosted infrastructure in various countries, and conducted Africa’s first outdoor 5G field trial.

In addition to the business imperative of improving infrastructure, Huawei has proactively fulfilled its Corporate Social Responsibility (CSR).

As the world largest telecommunications company, Huawei has aligned their CSR to the United Nations Sustainable Development Goals (SDGs) As such they have indicated that bridging the digital divide is one of their core missions, as it is vital to an array of developmental goals. They have therefore, built up an impressive list of social investments.

One of these social investments, is a communications base-station kit that disaster relief agencies can use in emergency situations. This kit takes just 15 minutes to set up and can fit into a standard-sized backpack.

Huawei has also invested R72-million ($5-million) in its first Innovation and Experience Centre on the African continent. In addition, the company works with 160 universities around the word to train students in Huawei certification, the most recent being the Tshwane University of Technology (in South Africa).

Huawei invests as much as 10% of its revenue in R&D, including investments into Innovation Centres around the world. There are currently seven, with the goal of operating 10 altogether.

Trade War

While much of the analysis of the trade war between the US and China centers around tariffs, one of the major sticking points continues to be the Unites States’ treatment of Chinese companies, specifically Huawei.

As such, a growing realization is festering, which sees beyond the tariffs, beyond import/export restrictions, beyond arrests and investigations. This is the elucidation that perhaps, a far bigger agenda is at play – and that is centred around the domination of the information-technology industry.

We are heading towards a tech-cold-war, where governments around the world will have to choose between doing business with Chinese and US Tech Companies. And despite the fact that many within the Trump administration have cited claims of espionage, the indictment, provides no such evidence.

However, if the tech-cold-war comes down to a choice between Chinese and American Internets and technology, Africa’s choice has already been made. Africa’s current internet and technology boom is in a significant part due to the investment of Chinese tech companies and the sale of quality components affordably.

 

Fazlin Fransman, Senior Research, Moja Research Institute

The article initially appeared in the Mail and Guardian