US-China Tensions Play Spoilsport For Huawei's Malaysian Ambitions

The EU and U.S. have warned the Malaysian government against national security and foreign investment threat from awarding a 5G contract to Huawei Technologies Co, Ltd.
The warning came after the Malaysian government decided to review a decision to award Ericsson ERIC an RM11 billion ($2.5 billion) tender to build a state-owned 5G network, Financial Times reports.
Malaysia's 5G launch battled setbacks due to industry concerns over pricing, transparency, and worries that a single government-run network would result in a nationalized monopoly.
Huawei had long been seen as the frontrunner for the contract, with the government having previously dismissed security concerns raised by the U.S.
The deal with Ericsson has enabled Kuala Lumpur to launch a single government-owned network that experts say implies lower costs and a speedier launch.
Malaysia, one of the region's slowest countries to roll out 5G, has promised 80% population coverage by the end of 2023.
One possible outcome of the review is that Malaysia will introduce a second 5G network next year. Huawei, alongside Finland's Nokia Corp NOK, was beaten by Ericsson in the open tender process, has been lobbying heavily for such a role.
Experts expect creating a second 5G network to add to the costs and cause inefficiencies.
Washington raised geopolitical tensions with China by imposing an embargo on China's tech industry, including blacklisting companies like Huawei and Semiconductor Manufacturing International Corp, and implementing strict controls on the export of chips and chipmaking equipment to China.
In April, Huawei developed enterprise IT management software to replace Oracle Corp ORCL to reduce its dependence on its Western counterpart. Oracle stopped providing software upgrades and on-site technical services after Washington's trade curb in 2019.
Photo by Tatiana Popova and rawf8 via Shuttterstock

Market News and Data brought to you by Benzinga APIs

Comments

Popular Channels

Tools & Features

Partners & Contributors

About Benzinga