|LG Uplus engineers work on the installation of 5G base stations in Anyang, Gyeonggi Province, April 26. Courtesy of LG Uplus|
By Baek Byung-yeul
|LG Uplus CEO and Vice Chairman Ha Hyun-hwoi|
Industry officials said Tuesday LG Uplus has been stymied by the Trump administration's demand for Korean companies to stop using Huawei equipment. The sanctions will inevitably deal a blow to LG Uplus but it will be difficult for the mobile carrier to replace its equipment with that manufactured by others, they said.
In a blow to Huawei, a growing number of carriers in Europe, Japan and elsewhere have decided to rule out Huawei as a supplier for their 5G network equipment.
Japan's Softbank decided recently to purchase 5G base station equipment from Ericsson and Nokia, with the Swedish and Finnish vendors separately announcing they were chosen by the Japanese carrier.
In March, TDC A/S, the largest mobile carrier in Denmark, chose Ericsson to build its 5G network rather than using its existing supplier Huawei. BT Group of the U.K. also announced it will remove Huawei equipment form the core of its mobile network soon to avoid the possible risks of cyberattacks.
But LG Uplus said the firm will continue to use Huawei equipment for its 5G base stations to ensure compatibility between LTE and 5G networks.
"It will be difficult for us to replace Huawei equipment with others. We have been using Huawei gear for our LTE network service. To ensure compatibility between LTE and 5G, we are using Huawei gear," a LG Uplus official said.
But an industry analyst said the U.S.-led Huawei boycott will keep clouding the outlook for LG Uplus.
"Given LG Uplus has invested enormous amounts of money in Huawei's equipment it is practically impossible to replace all of it. All they can do is stay low key and wait until the disturbance settles," said an official in the telecommunications industry.
The latest development in a string of U.S.-led Huawei boycotts came Monday after Reuters reported that tech companies around the world including LG Uplus, Qualcomm and Intel have stopped their employees from having informal conversations with employees of the Chinese firm.
The report said "such discussions are a routine part of international meetings where engineers gather to set technical standards for communications technologies," but several tech firms have restricted their employees from direct interaction with Huawei workers because "they want to avoid any potential issues with the U.S. government."
In response to the report, LG Uplus said it has not issued such a policy to its employees and the report was groundless.
Besides the boycott, Huawei also has had a bad rap for being vulnerable to cyberattacks, but LG Uplus said using Huawei equipment for its 5G base stations has no security problems because the products are isolated from security networks.
"There have been security concerns that information will leak when using Huawei equipment. These concerns are not applied to us because identification and management of subscriber information are processed in wired core networks. To build our wired core networks, we have been using Samsung Electronics equipment," the company official said.