US warns: Huawei 5G package is ‘obsolete by the time its operational’

Countries purchasing Huawei’s 5G wireless technology risk buying into a “China-only” telecommunications industry that lacks access to Western innovations, according to U.S. officials.

“These networks are not going to be up for two to three years; the stuff they're buying now will be outdated by then,” said Adam Boehler, who leads the U.S. International Development Finance Corporation. “You're essentially locking yourself into an outdated technology immediately. And so you've given up your national security for something that's going to weigh you down in infrastructure that is obsolete by the time it's operational.”

That warning takes aim at one of the central claims of Huawei’s sales pitch, as the flagship Chinese telecommunications giant is regarded as a pioneer of 5G wireless technology. President Trump’s administration regards the company as a platform for Chinese intelligence services, a suspicion driving a wave of U.S. policies designed to exclude the company from the Western telecommunications industry.

“Just saying, listen, be thoughtful, because the decisions you're making, it's not like your whole 5G system is up in six months from now,” Boehler said to summarize his message to foreign governments considering a Huawei deal. “You're making decisions and making bets that are coming up years from now. And do you want to bet on this today, or do you want to be thoughtful about a more software-driven virtualization solution.”

The Beijing-backed company offers the advanced technology at cut-rate prices, a tantalizing prospect, even for key U.S. allies, as governments around the world long for the economic development that could be powered by the ultra-high-speed technology. Boehler’s comments foreshadow a scenario in which Western technology companies, due to U.S. suspicion of Chinese companies, develop their 5G software and related programs in a way that is incompatible with Huawei infrastructure.

“People and businesses will not want the companies developing those applications to share data or design security functions with a serial human rights abuser and IP thief, in the form of Huawei,” another senior U.S. official predicted.

If Boehler’s argument blunts one prong of Huawei’s marketing strategy, his agency, the U.S. government’s private investment organization, could also help make it easy for Western companies to offer their 5G services at a competitive price. “Creative financing is the key,” the second official said, adding that the U.S. Export-Import Bank could also “help trusted vendors come in at competitive financing to Chinese companies.”

Boehler tied his prediction that Huawei technology will be obsolete to his view that the company as an agent of a domineering Chinese government.

“Huawei may offer cheap infrastructure, but are they really the second-generation solution that's going to be helpful when you actually need this? Because what I've found is that's a China-only strategy,” he said. “Our strategy, by the way, is not U.S. only, it's the best of breed across a lot of different countries and products.”