The American watchdog FCC has ruled that Huawei and ZTE pose a threat to national security. This means that telecom providers can no longer purchase hardware from companies with government subsidies. Existing equipment must be replaced.
According to Reuters news agency , the FCC unanimously approved the provision. By labeling Huawei and ZTE as a risk to national security, telecom providers can no longer purchase equipment by using a specially designated government fund. As a result, providers have to look for alternatives, for example for building their 5g networks.
The FCC has also determined that American telecom companies must replace their existing equipment from Huawei and ZTE in their networks. This would involve a price tag of around 2 billion dollars. The American policy may make part of that money available to purchase replacement equipment. Incidentally, providers are not completely excluded from buying equipment from Huawei or ZTE: for applications where their hardware is necessary, it is still possible to make a purchase.
The United States has been working for some time to hamper Huawei’s business. The company was previously already banned from trading, which means that American companies are not allowed to work with Huawei. This ban was, however, suspended a number of times.