Huawei founder says not yet talking directly with U.S. firms to license 5G

Huawei founder says not yet talking directly with U.S. firms to license 5G

CEO Ren Zhengfei says that the company will survive even though it doesn’t expect to be removed from the U.S. Entity List

Huawei Technologies Co Ltd is not yet directly engaged with any U.S. company over the firm’s proposal to ease concerns about the security of its platform by licensing its 5G network technology, its founder and CEO Ren Zhengfei said on Wednesday.

A Huawei executive told the press back in October that the company was in early stage talks with some U.S. telecoms companies about licensing its technology but warned that conversations were at an early stage and would likely take a long time to conclude.

The idea of a one-off fee in exchange for access to Huawei’s 5G patents, licenses, code and know-how was first floated by Ren in interviews with the New York Times and the Economist in September. But it was not clear whether there was any interest from U.S. companies.

“There are currently no U.S. companies talking to us directly, because middlemen who have come to talk do not necessarily represent the big U.S. companies, as this is a big and difficult introduction. It is only when someone is willing to come and discuss this issue with us will we find an investment bank to help us find an intermediary to discuss the deal, contract and cooperation, but not yet,”

Ren said in a conversation broadcast by the company.

In May, Trump banned U.S.-based companies from working with the China-based tech giant

In June, the ban was slightly lifted with the U.S. Department of Commerce indicating that some companies will be granted a conditional licence to work with Huawei.

The department has indicated that it will soon reveal which companies have been approved to work with Huawei, but that it will be very strict.

The U.S. has accused Huawei of using backdoors in its equipment to spy on citizens and feed the information to the Chinese government. It has also charged the company, Huawei’s CFO Meng Wanzhou and subsidiary Skycom for 13 counts of bank and wire fraud charges. These accusations have to still be proven in court and Huawei denies them.

Meng is currently waiting for her extradition trial to take place next year in Vancouver. Ren noted in the WSJ article that it doesn’t expect the U.S. to fully remove Huawei from the Entity List.

“They may as well keep us there forever because we’ll be fine without them,”

he said.

Ren said on Wednesday that the company was coping well with the U.S. blacklisting and Huawei was continuing to innovate without U.S. support, even though he hoped the ban would not be a long-term issue.

In fact, Ren said that the company expects to sell 240-250 million smartphones this year. In its Q3 2019 results, Huawei reported a 27 percent revenue jump as a result of an increase in smartphone shipments. That increase was before the company was placed on a ban list. So far this year, the company said it shipped 185 million smartphones and while revenues were not broken down, Huawei said for the first three quarters of the year it grew 24.4 percent to 610.8 billion yuan (about $113.7 billion CAD).