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Huawei admits that US sanctions are hurting

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Via Financial Times

Huawei is struggling to replace Google apps on its mobile phones after being hit by US sanctions, the company’s executives have admitted, saying it will be years before they can develop their own alternatives.

The Chinese telecoms company, which is in the middle of a global technology war between Washington and Beijing, is being hurt by the US export ban, its executives told the Financial Times. 

Senior executives from Huawei US said they had been able to find replacements for much of the equipment they used to buy from the US, but not the computing services sold by Google.

Joy Tan, vice-president of public affairs at Huawei US, said: “After the entity list, we were able to figure out some of the alternative solutions. The most challenging part is Google-managed services. We can continue to use the Android platform, since it is open-source, but we cannot use the services that help apps run on it.”

Officials in the Trump administration say they believe Huawei poses a risk to national security since its equipment could be used by Beijing for spying. This year it imposed an export ban that prevents companies from selling it US-made parts.

The move is part of a broader push to curb China’s economic and political power, including waging a trade war and sanctioning other technology companies that Washington says are involved in rights abuses.

Huawei has continued to grow despite the US sanctions, however. Last week it announced that sales had surged 27 per cent over the past year.

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Customers with existing Huawei mobile phones are able to still access Google’s Play app store, Google Maps and other products provided by Google Mobile Services, because of a temporary exemption that allows US suppliers to continue to service existing equipment.

But these services are not available on new Huawei models, which the company worries will deter foreign customers. Google services are already banned from Chinese handsets.

Huawei has been developing its own alternative operating system known as Harmony, but Ms Tan said it was a long way from being ready.

Asked whether it could take years before Harmony was able to replace everything Google can do, she replied: “Yes. We have to find alternative solutions for that ecosystem, but it’s going to take some time to build.

“There are so many Android users in Europe and south-east Asia, and they’re so used to these Google applications on top of Android phones.”

Huawei has been trying to secure a hearing in Washington to argue that it should be allowed to continue to buy equipment that is not sensitive for national security, as well as servicing its existing telecoms customers.

But, so far, Ms Tan said the company had not been granted a single meeting in Washington, either within the Trump administration or on Capitol Hill. “We continue to reach out, but we don’t get too many meetings. I haven’t spoken to anyone in the government, though not for lack of trying.”

Instead, the company has been relying on some of its US customers to lobby on its behalf, including rural telecoms carriers that use its equipment in their existing networks, and Google itself.

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Asked if Google continued to push the administration to be allowed to supply Huawei, Ms Tan said: “Many of our suppliers are talking with the US government, including Google, I’m sure.”

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