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MarketScreener Homepage  >  Equities  >  NASDAQ OMX STOCKHOLM  >  Ericsson AB    ERIC B   SE0000108656


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Huawei role in Brazil 5G up to national security chief - regulator

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02/18/2020 | 09:07am EDT
FILE PHOTO: The Huawei logo is seen on a communications device in London, Britain

The Brazilian telecoms regulator preparing to auction bandwidth for fifth-generation (5G) mobile data said any decision on the security risks of using Chinese technology will ultimately be taken by the president's national security advisor.

Leonardo de Morais, who runs regulator Anatel, told Reuters the auction, which he now expects will take place in November or December, is focused on service operators acquiring the right to use certain frequencies and not the hardware they will employ.

"Let's not mix things up," he said in a Monday interview.

Cyber security concerns for 5G technology are so extensive, with applications ranging from finance to agriculture, that the office of the president's national security chief General Augusto Heleno, known as the GSI, must set rules, Morais said.

Anatel approved the rules for the auction published by the government last week and opened a public review. If confirmed, it will be the world's largest 5G spectrum auction to date.

Chinese tech company Huawei Technologies Co Ltd, a world leader in 5G technology, is keen to sell components to telecoms operators in Brazil preparing to build out their high-speed infrastructure.

Huawei is expected to play a big role in deploying 5G networks in Latin America despite U.S. efforts to block that growth. The Chinese firm has warned that Brazil risks becoming less competitive if the auction is further delayed.

But it remains unclear whether Brazilian President Jair Bolsonaro, an admirer of U.S. President Donald Trump, will follow the American president's example and ban Huawei technology in Brazil due to concerns about Chinese espionage.

The Brazilian president's son, lawmaker Eduardo Bolsonaro, warned last week against involvement of Huawei in building the 5G network, telling O Globo newspaper that it could affect military cooperation between Brazil and the United States.

He said the United States would no longer trust Brazil if there was "interference" from China due to the alleged intelligence the Huawei technology could provide.

Not everyone in the Bolsonaro government thinks that way.

Vice President Hamilton Mourao said last year that there was no reason to stop Huawei's investments in Brazil. In May, on a visit to China, he met with Huawei Chief Executive Ren Zhengfei.

Brazilian carriers have pushed for free choice of suppliers, saying that more options will ensure the best quality of the resulting 5G network. Their current networks use a combination of hardware from Huawei and rivals Nokia and Ericsson.

Commenting on the current situation, the carriers' trade association simply said: "The rules for adopting 5G in Brazil are being defined by the competent authorities."

Anatel's long-awaited auction will take place in November or December at the latest, Morais said, after delays related to a public hearing and review by the federal audit court and the government's solicitor general.

In an emailed statement, Huawei said it "continues to follow discussions on the implementation of the 5G network in Brazil."

The company said it has been present in Brazil for 21 years and is ready to further its partnership with local operators by offering "our best equipment and solutions" for 5G networks.

By Anthony Boadle

Stocks mentioned in the article
ChangeLast1st jan.
ERICSSON AB -1.09% 80 Delayed Quote.-1.91%
EURO / BRAZILIAN REAL (EUR/BRL) -0.21% 5.5894 Delayed Quote.23.45%
NOKIA OYJ 0.29% 2.978 Delayed Quote.-9.65%
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Financials (SEK)
Sales 2020 238 B
EBIT 2020 24 072 M
Net income 2020 14 548 M
Finance 2020 27 929 M
Yield 2020 2,13%
P/E ratio 2020 18,6x
P/E ratio 2021 14,8x
EV / Sales2020 1,08x
EV / Sales2021 0,99x
Capitalization 284 B
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