By Siti Rahil, KYODO NEWS - Aug 16, 2019 - 18:45 | World, All

Trade tensions between the United States and China have sent a shiver across Southeast Asia, a region that depends heavily on both sides for its economic health, but when it comes to 5G, many countries in the region have shrugged off a U.S. ban on Chinese telecommunications equipment.

Their responses to Washington's on Chinese telecommunications giant Huawei Technologies Co. vary in line with their different levels of economic development, their aims in deploying next-generation 5G networks, and the state of their political relations with the United States and China.

What has made it difficult for countries to ignore Huawei is not only its edge in the development of 5G but also the fact that it has in recent years cultivated strong and close business ties with many countries in Southeast Asia.

"It has to be acknowledged that Huawei is a very established telecommunications player with strong brand equity and substantial ties to the Southeast Asia region," said Mansur Khamitov, an assistant professor at the Nanyang Business School, part of Singapore's state-run Nanyang Technological University.

"When a dominant company like this which has grown into a technology giant attempts to penetrate a certain market, it is typically very hard for key business, government, and consumer stakeholders to resist such efforts, particularly if we talk about developing countries," he said.

"This is likely what's happening with several Southeast Asian countries still choosing Huawei in spite of the U.S. warning of cybersecurity concerns and staying away from Huawei," he said.

The Philippines' Globe Telecom Inc. last month launched Southeast Asia's first commercial 5G fixed wireless internet service in the Philippines to provide high-speed home broadband to more households by using Huawei's equipment.

Its relationship with Huawei harks back to 2011 when it roped in the telecom giant as its technology partner for the implementation of a US$700 million network modernization program. In 2015, Globe signed a five-year contract with Huawei for the planning and design of a wireless broadband network, as well as the creation of a wireless innovation center.

(A 5G sign outside the headquarters of Huawei Technologies Co. in Shenzhen, China.)

In Malaysia, for example, Huawei was appointed an adviser to the government in developing the local talent pool for the info-communication technology (ICT) sector. In 2016, it opened an ICT innovation hub and center of excellence to accelerate digital economy transformation in the country.

Despite Western countries' warnings about cybersecurity risks, the Huawei booth to promote its technology for safe cities at the Interpol conference in Singapore recently attracted a steady stream of Southeast Asian delegations.

"Their technology is nice. Technology comes first, they have intelligent cameras," said Daniel Dela Cruz, a consultant for the security and command center in the provincial government of Pangasinan in the Philippines.

"Our concern is disaster management and crime prevention. International concerns like the trade war between the United States and China are not really our concern," he said.

Malaysian Prime Minister Mahathir Mohamad recently expressed cynicism about U.S. cybersecurity concerns over Huawei and has voiced support for the Chinese company.

On the other hand, Singapore, which has a close relationship with the United States but also burgeoning business ties with China, is eager to balance both sides.

(Southeast Asian countries showed interest in Huawei’s technology for security at a conference and exhibition in Singapore this year.)

"Many developing countries are more reliant on Huawei, and Singapore is probably less reliant on Huawei than other countries," said Sachin Mittal, an analyst at DBS Group Research.

According to Huawei officials, among the countries that have commercially launched 5G networks, two-thirds of them used Huawei to help construct their systems. As of the end of June this year, Huawei has gained 50 5G commercial contracts and shipped more than 150,000 base stations.

"Right now globally Huawei has the most advanced 5G equipment, being 12 months ahead, followed by Ericsson," said a Singapore official familiar with Singapore's 5G plans who declined to be identified.

Singapore is now in the process of defining and selecting its 5G system and the accompanying equipment as it plans to roll out 5G by next year. The situation is "really tricky at the moment" for Huawei due to the close U.S.-Singapore relations, the official said, adding he believes that "Singapore does not want to choose sides."

Singapore Prime Minister Lee Hsien Loong in June this year stressed the importance of trust when it comes to 5G, saying, "I need to have trust in order to use the system, and if I suspect that you will abuse my trust to compromise my systems, I will not be able to do business with you."

Another factor is ensuring there is vendor diversity.

"The telcos will talk to whichever vendors they want to. We are open to vendors from different countries to install their 5G equipment. As a government, we believe that there should be more than one vendor across Singapore," said the Singapore official.

Khamitov believes the company's efforts to reassure key stakeholders about their concerns will be a key factor.

At present, Singapore's plan for 5G is quite different from other countries in Southeast Asia.

While bigger countries use 5G for so-called last-mile coverage, to link up more far-flung locations, in Singapore, high-speed broadband is already well connected to homes and offices in the small island state while the mobile telecommunications rates are also fairly competitive.

As a result, Singapore sees 5G more as the backbone for the development of a world-class digital infrastructure for its envisioned digital economy in the future. It also aims to be a global hub for innovation in 5G applications and services and exporting such innovations.

"What we hope to see is people will use 5G to develop interesting applications to give us a bit of competitive edge worldwide," said the Singapore official.