Huawei is not only a smartphone vendor, neither a Cisco-like networking company. This company is much bigger than that. It belongs to the very closed circle of 4 large-portfolio telecom vendors. Others include Ericsson, Nokia and ZTE (another Chinese).
Huawei has an annual turnover of $100 billion from hundreds of customers worldwide. Their equipment are in the radio part, optical cables, wireline access, radio microwave, power systems, core networks, and others. If Huawei collapses, hundreds of telecom operators will have to spend huge sums (could go over $1 trillion) to swap their networks. Some parts are not too critical and can wait few years. But in many cases, action has to be taken immediately.
Where's the problem then? Not all of the operators will be able to find the necessary financing to rebuild their networks. Tens of them will go bankrupt, or nationalized. Those who can get the financing will face another problem: the manufacturing capabilities of the other vendors cannot be sufficient in the short and middle terms to meet the requirement. Let's say Ericsson, Nokia and ZTE are delivering 50,000 radio equipment per year. Suddenly, they're required to deliver 1 million. It will take them months to adapt their supply and manufacturing chains. Such an effort will require setting up temporary massive production lines at a very high cost.
This trillion dollars new market emerging from thin air will make huge profits for some and huge losses to others. Some third world countries will see their telecom ecosystem collapsing, so they will seek urgent financing from the IMF and the World Bank, then from international banks. Conditions and rates will not matter, and the consequences on their sovereignty will be painful.
What about the end users? The cost of Internet and mobile services will skyrocket, making them non-affordable to hundreds of millions of people. There will be much less people on the social media, taking their business model to the ground. Internet may look more like the end of the 1990s, with IRC and free niche forums.
The geopolitical consequences is another troubling dimension.
Submitted May 25, 2019 at 11:43PM by pacinothere http://bit.ly/2wjQvSK via TikTokTikk
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