- REUTERS/Aly Song
- Huawei is offering to sell its 5G technology patents to a Western company in a bid to quell fears about security.
- The US has urged allied nations to reject Huawei’s 5G kit on national security grounds, arguing that Huawei could be used as a conduit for Chinese state spying. Huawei denies this.
- CEO Ren Zhengfei told The Economist that a one-off sale of its 5G patents could create a viable competitor for Huawei.
- Ren said he had “no idea” of who might want to take the offer.
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Huawei is trying an unusual tactic to try to break its deadlock with the US government. It’s offering to sell the rights to all its 5G patents in a one-time-only offer.
Huawei’s CEO, Ren Zhengfei, told The Economist’s Hal Hodson that the company was offering to bundle up its 5G patents, licenses, code, and technical blueprints in a one-off transaction.
The idea would be to create a rival for the Chinese tech giant. “A balanced distribution of interests is conducive to Huawei’s survival,” Ren told Hodson.
Ren said he had “no idea” who might be interested in buying, and he did not put a figure on how much Huawei’s 5G “stack” might be worth. Hodson said it could run to tens of billions of dollars given the amount of money Huawei has poured into research.
The move is designed to placate concerns in the West about Huawei’s 5G dominance, coupled with the national security concerns from the Trump administration, which argues that Huawei could act as a proxy for the Chinese government to spy. Huawei denies this.
Huawei’s rollout of 5G has been actively targeted by the Trump administration, which has been advising allies to reject Huawei’s kit or risk damaging their relationship with the US.
At the same time the US has hamstrung Huawei by placing it on a trade blacklist, though Huawei has now received two 90-day licenses to give American firms time to disentangle themselves from the company.
The major threat from the blacklisting is cutting Huawei off from Google. Huawei phones all run Google’s Android operating system and come with Google’s bundle of apps including the Google Play Store, which allows users to download other popular apps such as Instagram and WhatsApp.
Though Huawei has developed its own operating system as a plan B, being cut off from the world’s most popular apps would put Huawei phones at a major disadvantage.
It is unclear whether the strategy floated by Ren would do anything to appease the US, whether China would approve the sale, or even whether Huawei would find a buyer.