Australian telcos blindsided by US trade war hit to Huawei


Huawei is the third-biggest handset provider in Australia but only sells a little over 6 per cent of phones, well behind market leaders Apple and Samsung with about 80 per cent between them.

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Huawei said in a statement that the company had made “substantial contributions to the development and growth of Android around the world,” and had worked with closely with its open-source platform to “develop an ecosystem that has benefitted both users and the industry”.

The company added that it would continue to provide security updates and after sales services and, “we will continue to build a safe and sustainable software ecosystem”.

The ban on Huawei came as chip makers including Intel, Qualcomm, Xilinx and Broadcom have also told their employees they will not supply Huawei till further notice under the Trump administration’s orders.

Optus and Vodafone said they company were working with Huawei and Google to understand the impact of the news to their customers, but Vodafone said there would be no immediate impact on users of Huawei phones.

Telstra declined to comment, but said it only offers Huawei’s flagship P30 handset, and it only began offering it last month.

Huawei's phones haven't been available in Australia for a long time, but they've gained a loyal following.

Huawei’s phones haven’t been available in Australia for a long time, but they’ve gained a loyal following.Credit:AP

In Beijing, foreign ministry spokesman Geng Shuang said China was yet to officially confirm the matter, but “supports its companies taking up legal weapons to protect their own legitimate rights and interests”.

“International business, trade, and investment should be based on mutual respect, equality and mutual benefit,” Mr Geng said.

“As to what detailed measures Chinese companies and government will take, you can wait and see.”

Huawei’s market share in Australia is small compared to overseas markets. Globally, Huawei is the world’s largest provider of networking gear and is the number two smartphone vendor.

The Trump administration announced on Friday it had blacklisted the company, which it accuses of aiding Beijing in espionage.

If fully implemented, the Trump administration action could have ripple effects across the global semiconductor industry. Intel is the main supplier of server chips to the Chinese company, Qualcomm provides it with processors and modems for many of its smartphones, Xilinx sells programmable chips used in networking and Broadcom is a supplier of switching chips, another key component in some types of networking machinery.

Representatives for the chipmakers declined to comment to Bloomberg.

Huawei “is heavily dependent on US semiconductor products and would be seriously crippled without supply of key US components,” said Ryan Koontz, an analyst with Rosenblatt Securities.

The US ban “may cause China to delay its 5G network build until the ban is lifted, having an impact on many global component suppliers”, he said.

The American companies’ moves are likely to escalate tensions between Washington and Beijing, and the move by Google will severely curtail the sale of Huawei smartphones internationally.

Huawei, the world’s largest smartphone brand after Samsung, was one of a select few global hardware partners to receive early access to the latest Android software and features from Google. Outside of China, those ties are critical for the search giant to spread its consumer apps and bolster its mobile ads business.

The Chinese company will still have access to app and security updates that come with the open-source version of Android.

Colin Kruger is a business reporter. He joined the Sydney Morning Herald in 1999 as its technology editor. Other roles have included the Herald’s deputy business editor and online business editor.

Michael Bachelard is The Age and The Sydney Morning Herald’s foreign editor and the investigations editor at The Age. He has worked in Canberra, Melbourne and Jakarta as Indonesia correspondent. He has written two books and won multiple awards for journalism, including the Gold Walkley in 2017.

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