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THE INVESTOR
June 20, 2019
Big Reunion

Mobile & Internet

Korean telcos distance themselves from troubled Huawei

  • PUBLISHED :May 27, 2019 - 15:05
  • UPDATED :May 27, 2019 - 15:05
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[ETNEWS] Mobile carriers KT and LG Uplus have decided to exclude Huawei Technologies in their respective new projects to set up network backbones across South Korea in wake of the US government’s escalating campaign against the Chinese firm.

KT, the second largest mobile carrier in the domestic market, has picked US network equipment manufacturer Infinera for network equipment installation from June. In the new project, it plans to upgrade the existing facilities while establishing a new nationwide network for 5G services and 10-gigabit-per-second internet connections.

No. 3 mobile carrier LG Uplus has also chosen a different optical network equipment firm over its long-time partner Huawei to install a nationwide network backbone here. 


Huawei’s booth at the MWC trade show held in March in Barcelona. Yeo Jun-suk / The Investor



The exclusion of the Chinese firm is said to have come at the request of The US Forces Korea, which is concerned about security risks that could be posed by the Chinese firm.

With LG Uplus’ latest decision, the USFK is expected to make use of communications services free from alleged security threats.

“LG Uplus has discussed the security issues with USFK for a while, and the Trump administration’s ban on Huawei sped up its decision,” an executive from a network equipment firm said.

A company official said, however, diversifying equipment providers is just part of its efforts to better respond to network emergencies.

The latest move by KT and LG Uplus has drawn much attention as it could encourage other companies to jump on the bandwagon.

Many Korean telecom and internet firms, including SK Telecom, KT, and SK Broadband are currently utilizing devices made by Huawei to run their network backbones. However, they have been pressure, both directly and indirectly, by the US government to sever the existing partnerships.

NongHyup Bank is rumored to be reconsiderig a $100-million-deal with a consortium of KT and Huawei to install wired network systems across the nation. The consortium was selected as the preferred bidder in November last year. State-owned energy firm Korea Electric Power Corp., which currently deploys Huawei’s communications technology, could join the move to cut ties, according to some industry sources.

Some experts were concerned over a possible backlash by the Chinese government like the retaliatory actions against Korean companies after the installation of the US THAAD anti-missile system in 2017.

“Drastic changes in position could cause allies to feel uneasy, so gradual changes should be made,” said Kim Yoen-hak, a management professor at Sogang University, adding, “The Korean government needs to make diplomatic efforts simultaneously.”

By Kim Yong-joo (kyj@etnews.com)

This story was co-produced by ET News and The Investor. For any inquiries, contact Kim Young-won (wone0102@heraldcorp.com)

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