Telecom firm’s US business partners face uncertainty

Source: Xinhua | 2019-05-29

THE US government’s latest move to blacklist Huawei has forced the Chinese telecom giant’s business partners in the United States to brace for mounting uncertainty.

Among them is LHTC Broadband, a telecom company focused on the rural area of the US state of Pennsylvania. It offers telephone, TV and Internet services to 7,000 rural locations, of which 1,600 are served with Huawei gear.

What has perplexed LHTC CEO James Kail is that he has never seen an issue of security threat in Huawei equipment — not only in the past few months in which accusations have been made by the US government, but also throughout the last five years of partnership with Huawei.

US President Donald Trump on May 15 declared a national emergency over what he called threats to US technologies. The US Department of Commerce on the same day put Huawei and its affiliates on a blacklist, meaning the sale and transfer of US technologies to Huawei must be approved by the federal government.

“We haven’t had any issue with the equipment itself, and on top of that, the pricing was very competitive,” Kail said, recalling that it was a prudent business decision for LHTC to choose Huawei as a supplier five years ago. As of the end of 2018, 90 percent of LHTC’s fiber-deploying project using Huawei solutions has been completed, and the remaining 10 percent is expected to be finished by 2020.

“It’s been five years and we still haven’t seen any proof (of security threats),” Kail said.

That said, the ban could deal a severe blow to LHTC, which has only 65 employees. To take out all the Huawei equipment “will be obviously a significant hardship for a small company like us,” Kail said.

According to Kail’s estimates, it will take LHTC about one year to completely replace the existing Huawei equipment if the company focuses solely on that. The cost is expected to total between US$400,000 and US$500,000, he added.

Apart from the replacement cost, what also concerns Kail is a potential sudden suspension of Huawei’s technical support once the restriction kicks in.

“If we weren’t able to have any technical support for upgrades because Huawei was shut off, that would be another problem,” Kail said. He added that LHTC is closely monitoring the situation because of its investment in Huawei and “the potential significant impact on our company.”

Noting that it has been a good partnership over the last five years that LHTC had with Huawei, Kail said Huawei has been “very responsive” when problems occur.

Kail said LHTC is one of the first small telecom companies in rural America to partner with Huawei, partly because major US telecom carriers do not bother to serve residents in scarcely populated suburbs.