Qualcomm to supply Huawei with 4G products
Qualcomm, the North American software and semiconductor multinational, has been granted a license from the US government to sell 4G hardware to Huawei Technologies.
However, the spokesperson revealed the parts were related to mobile devices but declined to comment on the type of 4G products Qualcomm can sell to Huawei. They added that Qualcomm has other license applications pending with the US government.
Other US companies have also applied for trade licenses that will allow them to sell to Huawei, including Micron Technology and Intel.
The move comes amidst rising trade tensions between the US and China as Qualcomm, along with all other American semiconductor companies stopped selling components to the Chinese technology firm following US trade restrictions in September.
Previously, Huawei was a minor chip customer for Qualcomm, which is the world’s biggest supplier of mobile phone chips. The Chinese technology firm used its own house-designed chips in its premium devices and placed Qualcomm chips in lower-end handsets.
But Huawei’s ability to create its own chips ended following September’s US trade restrictions. These blocked the company’s access to chip design software and fabrication tools. Analysts say Huawei’s supplies of chips acquired before the embargo may run out in early 2021, halting its smartphone business.
Some commentators also believe the ban on chip sales was enforced on tenuous grounds because it wasn’t related to preventing espionage. , editorial director of the online trade publication Telecoms said, “The latter [the US chip ban] was ostensibly about preventing political espionage.”
He continued, “The rationale given was more to do with industrial espionage, but on that basis then surely all Chinese companies should be banned from buying anything American”
Bicheno added that the new US presidency was unlikely to have a major impact on the embargos, although the approach to issuing licences would probably become more relaxed. He said, “The Biden presidency, assuming Trump’s legal efforts fall short of overturning the election result, may well take a less adversarial position on China. The precedent has been set, however, and Biden won’t want to seem to be ‘soft’ on China, so while much of Huawei’s smartphone business now has a lifeline, it may still be excluded from the 5G era.”
Bernstein analyst also said the Qualcomm license won’t help Huawei’s current problem because it only covers the sale of 4G chips and consumers are moving towards 5G devices. He added that US officials have not yet granted Qualcomm a license for selling 5G chips.
Telstra in talks to buy Digicel Pacific in Australian deal
Telstra has announced today that it is in talks with the Australian government as it looks to purchase the Pacific operations of the Jamaican telecommunications company, Digicel Group. The move is considered to be politically motivated in an attempt to block China’s influence in the region.
According to Telstra, the majority of bids for Digicel would be financed by the Australian government. Digicel is currently the largest mobile phone carrier in the Pacific and has operations in Fiji, Papua New Guinea, Samoa, Tahiti, and Vanuatu.
While no specific financial details were provided, Australian media has reported that, if secured, the deal would be worth about US$1.5bn (AU$2bn) with the Australian government paying around US$1.1bn (AU$1.5bn).
The media claims that equity will be split after debt and Telstra will acquire up to 30% of the company.
Chinese sale a “cause for concern” due to competition with U.S allies
Selling Digicel to a Chinese company would be a “cause for concern” for the Australian government due to strategic competition between U.S allies and China in the Pacific region. Jonathan Pryke, Director, Pacific Islands Program at the Lowy Institute, a Sydney-based think tank, explained: "The Australian government is trying to achieve a few things at once. Digicel is the primary player in the Pacific and Australia sees it as a strategic asset that they can't allow to fall into the hands of China. They are keen to get Australian business back into the Pacific and they've come to the realisation that they are going to have to underwrite”.
A deal would also mean that Digicel would underwrite its future revenue forecasts for the next three years, according to the Sydney Morning Herald.
As a company with a large market share in Papua New Guinea, Digicel uses a submarine cable from Sydney constructed with funding from the Australian government to expand data services there.
Built in 2018, the 4,700-km (2,900-mile) Coral Sea cable was largely funded by the government to head off initial agreements between Papua New Guinea and the Solomon Islands for Chinese telecoms company Huawei to lay it.
Australia, in partnership with the United States and Japan, is also financing an undersea optic fibre cable for Palau, while Nauru, a small country in Northeast Australia, is planning to construct an undersea cable to connect an Australian network. The country rejected a Chinese proposal to lay the cable.