May 20, 2019
U.S. Plans Temporary Exemptions to Huawei Blacklist
Reprieve, which could ease U.S.-China tensions, would ensure operations of existing networks
U.S. officials said Monday they would grant a handful of temporary exceptions to an export blacklist against Huawei Technologies Co., giving some suppliers and customers of China’s telecom giant a 90-day reprieve from tough trade penalties.
In an order scheduled to be published on Wednesday, the Commerce Department said it would grant a temporary license for U.S. exports to Huawei and dozens of its affiliates. The U.S. issued the blacklist order last week on grounds that Huawei was a national security threat.
US Government Ban Of Suppliers To Huawei Will Drive Global Increases In Hardware Costs
We are seeing companies like ARM (one of the most strategic elements of the wireless value chain) already start to sever ties with Huawei (https://www.fiercetelecom.com/telecom/while-huawei-preps-its-own-os-arm-cuts-ties) which is going to impact cellphone prices and increase the ASP for cellphones globally. Huawei has historically taken a value for money play; and will price like-for-like functionality at a 30% discount to competitors in each handset segment (Low, Mid, High). When the inventory of parts runs out; and should there be no change in policy you will see a major spike in ASPs for cellphones at the worst possible moment for out Telecom Operator partners; as they get set to launch very expensive 5G cellphones
We anticipate that Huawei will also be impacted on the network infrastructure side of the house; and this will be a boon to Ericsson, Nokia and look for Samsung to become more aggressive in infrastructure. The result is that network infrastructure costs will also increase also at the worst possible time for our Telecom operator partners
Long story short expect 5G handsets and airtime to cost a lot more; because it’s going to cost the Operator a lot moreBack