There’s a lot going on under the surface of @Huawei’s CFO (and daughter of founder of Chinese telecom giant) being arrested in Canada. Here’s a primer and what it all means:
<<deep breath>> Cue — twitter rant:
<<deep breath>> Cue — twitter rant:
What you need to know is this a global gnarled between the West and China over who builds the digital highway of the future, and which govts *may* be able to leverage them for their own advantage
In the past, the likes of Ericsson, Nokia, Motorola, Samsung, etc have pretty much run the board of providing the equipment to build global telco networks. That made sense, cos they were only game in town
But over 10ish years, Chinese players like HUAWEI and @ZTEPress have become global players, partly because of China’s preferred purchasing of their equipment at home & ability of Chinese to undercut West on price
What does that all mean? Well, Huawei went from but player to now the world largest telecom equipment provider, with 28% global market share (vs 27% for Ericsson and 23% for Nokia) capacitymedia.com/articles/37940…
But why does that matter? I mean, it’s just telco equipment, right? And, supposedly, HUAWEI isn’t owned by Chinese govt (though BIG long of salt required to think company doesn’t have govts blessing)
Well, by becoming the main provider of equipment that powers people’s digital lives, Huawei *could* use such leverage to tap into a raft of sensitive information through backdoors, etc (to be clear, the company vigorously denies this, and there’s been little proof of abuse)
But because of these security concerns, the likes of US, NZ, Japan, Australia, etc have blocked their national carriers from using Huawei’s equipment, out of fears of data leakage to China
The irony: @Snowden’s revelations showed that US govt was accessing people’s digital info through backdoors, but I digress...
So that’s the background. But the arrest isn’t really about that. It’s all about 5G, the next generation of mobile networks that will define how we all use the internet for next 10-15 years (a primer I wrote on what 5G will mean for you nytimes.com/2016/02/22/tec…)
Unlike previous generations of mobile telecom equipment, China is lining up to be a major player in 5G — the govt has made it a national priority, Huawei, etc have invested billions in tech, and almost half of 1.4bn 5G users by 2023 will be Chinese
In short, China isn’t going to let the West have its own way on 5G, and just as carriers worldwide start to spend big on equipment to build these network, Western govts are realizing that maybe they don’t want HUAWEI to be at the center of their networks
In short, it’s a West vs Wast showdown, and comes as trade tensions between US and China (and therefore everyone else stuck in middle) are going from bad to worse politico.eu/article/5g-tel…
But the irony is, many of these Western govts, until very recently, we’re super happy to welcome HUAWEI in, here’s @laurenscerulus explaining how China became “ghost” in Europe’s telecom world: politico.eu/article/huawei…
And both UK’s Theresa May and Liam Fox also have been very supportive. Here are statements from when Huawei commuted £3bn of investment to UK. #awks 
So, imho, the arrest of Huawei's CFO (allegedly, on charges of violating the US's sanctions on Iran) is the latest escalation in global battle over 5G, data access by spooks and who gets to set the rules for how we all use the internet
Sure, that might seem a little over the top. But think about this: if Chinese companies provide the lion's share of mobile telecom infrastructure, and *if* that market share is used to provide Chinese govt with backdoor access to all our data, etc, that would be a big deal
To be clear, Huawei, ZTE, etc vigorously deny these claims, and as Western govts have been found to be using their own backdoors to access our data, it's a little disingenuous to accuse China of doing this. Cue one of my favorite gifs
So that's where we are. Western govts don't want Huawei, et al to be at center of 5G networks. China is (legitimately) trying to expand its corporate clout, particularly in telecom infrastructure. And we're likely to see a lot more of this going forward
Final (contrarian) thought: Chinese equipment makers, on average, are cheaper than Western counterparts. If West blocks Chinese firms from building networks, and costs of those networks rise significantly, it will likely be you and me as consumers who have to fork the bill
Rant over. Thoughts appreciated.
PS: yes, I know there are a bunch of typos. I blame my smartphone’s autocorrect HT: @mwolgelenter
Also, loving how non-tech media is covering this story. From @JustinOnWeb on @BBCr4today: "Huawei is the Chinese technology company whose bits & pieces, if I can use the technical term, are in so much of the world's technological efforts" (I kid b/c I care)
