Are security concerns over Huawei a boon for its European rivals?

The geopolitical technology saga is complicating business for the industry
The Economist 2019-3-23

IN THE DAYS of pre-internet capitalism the troubles of one dominant company in an industry tended to be good news for its rivals. In today’s hyperconnected world a threatened ban by Western governments of Huawei, the Chinese market leader in telecoms gear, is also a worry for its competitors. Both Ericsson, a Swedish company, and Nokia, a Finnish one, would prefer the geopolitical saga to end, the better to focus on competing for contracts related to the launch of super-speedy “fifth generation” (5G) mobile-phone networks.

The American government is not letting up its campaign to persuade allies to freeze Huawei out of 5G tenders. It worries that Huawei’s kit may contain “back doors”—deliberate security flaws inserted to allow Chinese spooks eavesdrop on, or attack, phone networks. Earlier this month, in a letter to Germany’s economics minister, America’s envoy to Berlin, Richard Grenell, threatened to cut back American co-operation with German security agencies if the country allowed Huawei or other Chinese firms to participate in the roll-out of 5G. Mike Pompeo, America’s secretary of state, suggested in Hungary recently that doing business with Huawei could tip decisions on where America stations troops.

So far Britain and Germany, among others, have not yielded to American demands. Angela Merkel, the German chancellor, said on March 19th that she does not believe in excluding a company from the German market “simply because it’s from a certain country”, though a final decision is pending. Even if America prevailed in Europe, as it has in Australia and Japan, Ericsson and Nokia are unlikely to win back much of the market they have lost in recent years. Between 2015 and 2018 Huawei’s share rose from 24% to 28%; Nokia’s dipped from 20% to 17% and Ericsson’s from 15% to 13%. An escalation in the war on Huawei might prompt Beijing to retaliate by kicking Western firms out of China.

That would be a blow to the Nordic duo. China accounted for 10% of Ericsson’s 211bn krona ($24.2bn) in global sales last year. The company runs two research and development sites in China. Nokia derives a similar share of revenues from the Chinese mainland, Hong Kong and Taiwan. Extra sales in Europe in the event of a Huawei ban would not offset losses in China, argues Pierre Ferragu of New Street Research, not least because the Chinese will launch 5G a year or two earlier.

More important, worries Börje Ekholm, chief executive of Ericsson, a ban on Huawei would slow down the launch of 5G in Europe. The continent is already lagging three to four years behind America in 4G, the current generation of wireless technology, he says. Uncertainty over regulation, pricing and, most of all, how to deal with Huawei, is likely to slow Europe down further. European operators are lobbying hard to maintain the choice between three purveyors; many prefer Huawei wares, which are often cheaper (and some say better).

The spectre of a Huawei ban is putting a damper on Germany’s auction for 5G mobile spectrum that kicked off on March 18th in Mainz. The auction, which drew four big operators, is expected to last several weeks. All four bidders already make extensive use of Huawei hardware, such as antennae or routers. Upgrading to 5G will require splurging on new kit. Huawei wants to be one of their principal suppliers (though it may first need to meet more stringent security requirements which the German government is mulling). In November the Chinese company opened a lab in Bonn, the base of Germany’s cyber-security regulator, where its equipment can be tested.

Though it is possible to ban Huawei completely from Europe, its biggest market outside of China, industry insiders warn that it would be hugely complex and costly. It would be especially disruptive in countries where Huawei is deeply embedded, such as Italy, Poland and Britain, says Stéphane Téral of IHS Markit, a research firm. With only a hint of hyperbole Bengt Nordstrom of Northstream, a consultancy, likens the resulting shock to the collapse of Lehman Brothers in 2008. Most of Europe’s roughly 200 operators of mobile networks use Huawei’s 4G gear.

Asked whether talk of a Huawei ban had any effect on the order books of Ericsson, Mr Ekholm responds that “the candid answer is no”. On March 18th TDC, Denmark’s biggest telecoms firm, confirmed that it was plumping for Ericsson over Huawei, its current equipment-maker, to build its 5G network. That deal, though, was struck before any concerns over Huawei were ever aired. So far, the entire controversy has been a headache for Mr Ekholm and his counterpart at Nokia, not a gift.

Notes

IN THE DAYS of pre-internet capitalism the troubles of one dominant company in an industry tended to be good news for its rivals.
描述旧时代的商业种种：在前互联网时代。

hyperconnected world
全球化的时代，连接紧密，动一则动其余

allow Chinese spooks eavesdrop on
中国特工，窃听

The American government is not letting up its campaign to persuade allies to freeze Huawei out of 5G tenders.
let up: 放松，EX：He is not letting up his effort to chase dreams.

freeze sb↔'out (of sth) (informal) to be deliberately unfriendly to sb, creating difficulties, etc. in order to stop or DISCOURAGE them from doing sth or taking part in sth 排挤，排斥（使不能参与…）

Huawei’s kit may contain “back doors”
华为的设备可能含有后门
这是为什么美国力劝盟友不让华为参与5G的投标

threatened to cut back American co-operation with German security agencies
减弱美国的合作，不跟你合作了

doing business with Huawei
做生意

So far Britain and Germany, among others, have not yielded to American demands.
屈服于美国的提议（要求）

a final decision is pending.
还没决定，待定

excluding a company from the German market
将公司驱除出某个市场，排除，exclude

Ericsson and Nokia are unlikely to win back much of the market they have lost in recent years.
赢回市场

Extra sales in Europe in the event of a Huawei ban would not offset losses in China, argues Pierre Ferragu of New Street Research, not least because the Chinese will launch 5G a year or two earlier.
假如、如果发生，EX：in the event of failure；弥补损失；不仅仅是因为

The continent is already lagging three to four years behind America in 4G, the current generation of wireless technology, he says.
在4G方面已经落后于美国3-4年了。

European operators are lobbying hard to maintain the choice between three purveyors; many prefer Huawei wares, which are often cheaper (and some say better).
奋力游说；三个供应商，即：Nokia、Huawei、Ericsson

The spectre of a Huawei ban is putting a damper on Germany’s auction for 5G mobile spectrum that kicked off on March 18th in Mainz.
恐惧忧虑

put a 'damper on sth (BrE also put a 'dampener on sth) (informal) to make sth less enjoyable, successful, etc. 抑制；使扫兴；使沮丧

kick off: 足球开球开赛了，引申为开始、开幕

make extensive use ofHuawei hardware
广泛应用

industry insiders
行业翘楚，内幕人

the candid answer is no
直言不讳的回答是：No。

Views

核心就是：美国想要劝阻欧洲小伙伴们别让Huawei参与5G投标以及后续的布局扩张，但是呢，欧洲小伙伴们，觉得这样很不值。

1. 我们不少地方已经在4G技术上落后你美国了，如果ban了华为，欧洲5G布局又得落后。发展自身硬道理，为何还要给你当枪使？
2. 算算经济账，得不偿失。
   1. 华为电信基站等技术供给，本来就比较便宜。
   2. 之前就是用的华为的，再用别的，有转换成本。

Extra sales in Europe in the event of a Huawei ban would not offset losses in China, argues Pierre Ferragu of New Street Research, not least because the Chinese will launch 5G a year or two earlier.

More important, worries Börje Ekholm, chief executive of Ericsson, a ban on Huawei would slow down the launch of 5G in Europe.

It would be especially disruptive in countries where Huawei is deeply embedded, such asItaly, Poland and Britain
这三个国家，用华为比较多

文中还有一个观点：在从前，一个公司受挫，其竞争者会受益良多。但是如今，情况并非如此。客户需要考虑的因素会比较多，如上文所说的那些，所以，不是那么简单容易就换供应商的。

Most of Europe’s roughly 200 operators of mobile networks use Huawei’s 4G gear.
运营商有很多，比如国内的移动、电信、联通，但是基站通信技术供给者，能做得不多。在欧洲比较多的，就是华为、诺基亚、爱立信。现在欧洲是华为的海外主战场。

Other

在美国的第一个晚上，在路上花了27个小时，真的快累瘫了。

时间上比较紊乱了，我这里现在是3.29凌晨1点多。（捂脸哭）
落下的回头再补上。