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U.S. Hacks Huawei Networks, Claims “Backdoor,” Like Nokia & Ericsson

All we know is a leak to Bojan Pancevski, Germany correspondent for WSJ. He writes, “U.S. Officials Say Huawei Can Covertly Access Telecom Networks.” The U.S. is almost certainly blowing this up; both Germany and the UK confirmed Huawei purchases after the U.S. shared the classified information.

Neither Pancecski nor anyone speaking publicly has seen evidence this is a deliberate “backdoor,” as the U.S. government called it. Nor has the U.S. found any evidence its been used for spying. Neither can be ruled out because the evidence is hidden.

More likely, the U.S. has discovered a way in. Vint Cerf explains there are two types of systems: those already hacked or those that will be.

U.S. espionage spends $50 billion a year, supporting literally tens of thousands of (often brilliant) people dedicated to infiltration. Huawei gear is target #1.

It would be surprising if the U.S. didn’t find a way in that could be the real story.

Viviane Reding Applauds Huawei Europe Manufacturing


Huawei is negotiating for a European assembly plant for 5G, a move it has been considering since before the political crisis. Viviane Reding said that “Of course this will really be a boost to credibility since the manufacturing would be under European rules”

Reding was a passionate supporter of a better Internet when she was the telecom leading at the EU. She insisted that roaming charges be reduced and eventually eliminated. That brings down consumer costs.

Reducing competition by blocking Huawei and ZTE would raise prices and possibly reduce 5G deployment. That’s a high price to pay unless security risks are proven. Viviane is a conservative who understands competition is crucial.

Huawei is by far the most international company in telecom. It has large research establishments in Canada, Germany, UK, Scandinavia, India, Russia and more. It wants to open a relatively modest chip foundry in England and is scouting locations for manufacturing as well.

There is relatively little labor involved in telecom production so high wages are not a major impediment.

Huawei China’s Largest Software Company

The latest report from MIIT shows Huawei at the top of the list of 100 largest software companies in China. On reflection, that’s not surprising. Half of Huawei’s business is now phones, where chief rival Apple has long considered itself a software company.

The great achievement of Huawei’s phone division was to pull ahead of everyone in the quality of picture-taking. The hardware can be matched; Huawei’s advantage comes from software.

The Hong Meng/Harmony operating system is more than just an Android replacement. It’s already being used on TVs and IoT devices. Huawei’s Cloud division is among the fastest growing, requiring a massive investment in software.

The key performance improvements in telco networks are likely to come from software, not hardware. Massive MIMO and more spectrum are currently the key drivers, but the performance of today’s wireless systems is again approaching Moore’s Law limits.

Reconfiguring beams and coordinating cell sites has enormous potential, which Huawei has demonstrated at trade shows. The location of mobile users shifts very rapidly as people head home from schools and offices at the end of the day. In urban areas, a telco can adjust the overlapping cells to match the traffic demand.

Ultimately, the likely goal is a “no cell” network, constantly reconfigured for maximum efficiency. Huawei is spending heavily on the necessary software.

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Huawei Dives Into DC Swamp

Huawei paid $2.5 million to Michael Esposito in six months. He was selling access to the President and top Republicans. Esposito claimed he

has “an open line of communication to the President of the United States” and is in “regular” contact with the president.

Actually, Esposito is a con man, who was raided by the FBI.

That’s the way things are done in DC. AT&T paid Donald Trump’s bagman Michael Cohen $600,000. It also hired VP Pence’s former chief of staff Bill Smith. Facebook just hired David Redl, who recently was head of NTIA in the Commerce Department. Plenty of Democrats are on the gravy chain, not least Joe Biden’s kids, who knew exactly what they were being paid for.

The likely pay for a senior government official willing to become a lobbyist is $1 million or more, according to Colin Crowell, who once was chief of staff on the House Communications Committee.

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Ekholm of Ericsson: Huawei’s not better

Borje Ekholm, Ericsson CEO, says there’s ‘no one ahead of us’ on 5G — not even Huawei. Huawei’s $17B research budget makes them formidable, but the oft-heard claim that no one comes close is exaggerated. Huawei makes excellent equipment, but they are not the only one.

There’s no simple way to say who’s ahead in a technology with literally a thousand different aspects. Huawei and ZTE delivered Massive MIMO in 2016, two years ahead of the Westerners. But Ericsson is first with field demonstrations of “dynamic spectrum sharing,” which makes 5G in lower frequencies more efficient.

We have field results from Chinese and Korean carriers using both Huawei and Ericsson equipment. There’s no evidence either is ahead.

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Survive & Thrive: $121,800,000,000 240M phones

Huawei’s Q4 sales were $36,000,000,000. Sales for 2019 were up 18%. 55 million phones sold for a total of 240 million on the year.

Huawei will “survive and thrive,” I wrote the Washington Post back in May. I had researched the components Huawei needs; all but a handful could be sourced outside of the U.S. It had over $30 billion in cash to provide a cushion, with little debt.

The Chinese government was not going to let its premiere industrial company fall behind. It has countered the U.S. attacks around the world. Both India and Germany came under enormous U.S. pressure. Neither has bolted.

5G in China is providing a remarkable boost. China is on track to have 150 million 5G phones by the end of 2020. That’s likely 10 times as many as any other country.

130,000 radios are in place; over 400,000 will be added in 2020. The Minister said, “accelerate” and the results are remarkable. China will be over 2/3rds of the 5G market this year, leaving everyone in the dust. DC claims the U.S> can be #1 are a joke.

Huawei is benefiting enormously from the growth in China. It nows has over 40% of the Chinese phone market. The Chinese people are switching to Huawei, in a spontaneous show of patriotic support. In 2020, China is likely to meet or exceed the 400 million phone sales of the last few years.

WSJ Discovers China Ties Export Credits, States Offer Location Incentives, and Banks Give Loans to Large Companies

WSJ is shocked, shocked to discover that China supports major Chinese companies. The first half of the article and the headline encourages the reader to infer that unreasonable Chinese government support is why Huawei has done so well.

The facts in the article don’t support that claim. By and large, the inference is inaccurate. Huawei’s success is primarily due to extraordinarily hard work and farseeing management. Like most large companies, it takes advantage of government support, which often favors tech companies.

Yes, the government ties low-interest loans in Africa to purchases from Chinese companies. So do the US, the Koreans, and many others..

The city of Dongguan provided low-cost land for a large research center. Dozens of US cities, including New York & Washington, offered massive subsidies to Amazon when considering a second headquarters. Wisconsin promised $3B for a Foxconn plant.

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CTO Enrique Blanco: “I have found no evidence of a security risk.”


Blanco of Telefonica is one of the most respected CTOs in world telecom, winning many awards. He’s engineered networks for 35 years, now in charge of hundreds of millions of lines at Telefonica. He’s been deeply involved in 3G, 4G, and 5G. His fiber network is one of the top two in Europe.

“We have no evidence of back doors … we monitor every day,”  he tells Reuters. Blanco was announcing that Telefonica and Telefonica/O2 would add a second 5G supplier alongside Huawei. That’s pragmatic and protects TEF from political problems.

Almost no one outside the security apparatus believes Huawei is spying for China. Even German Chancellor Merkel, who has access to security files, hasn’t seen any reason to believe it.

“There will be consequences”

Ambassador Wu Ken warns, “If Germany were to take a decision that leads to Huawei’s exclusion from the German market, there will be consequences. The Chinese government will not stand idly by.

He indirectly threatened retaliation against the German automakers in China with a hypothetical example. “It would be pure protectionism if Bejing labeled German vehicles unsafe just because it can produce its own cars.”

Germany’s share of the world auto market has fallen by half in recent decades. German companies produced 8 million cars in China in 2018, about a quarter of the market. German automakers have invested tens of billions in China.

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No American Parts – Wall Street Journal

Asa Fitch and Dan Strumpf report that a Huawei Mate 30 has been manufactured without any US parts. I’ve been reporting since May that Huawei would break its dependence on US components. It has done so already with 5G radios, now shipping hundreds of thousands per quarter.

The image above shows a Qualcomm front end module in a Nov 7 teardown of a Mate 30 Pro 5G by Techinsights. There were two other US components, but Huawei has done an exceptional job gaining independence. It made few if any radio frequency parts eight months ago. HiSilicon now has a wide selection of RF.

The Mate 30 Pro 5G is much more demanding than the 4G version. It has to filter and amplify more than 2 dozen frequency bands at 5G speeds. It makes sense it’s taking a little longer to replace everything in the 5G version.

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