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Huawei, ZTE to Face Tightened Restrictions as US President Joe Biden Signs Legislation

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By Reuters | Updated: 12 November 2021

US President Joe Biden on Thursday signed legislation to prevent companies like Huawei or ZTE that are deemed security threats from receiving new equipment licenses from US regulators.

The Secure Equipment Act, the latest effort by the US government to crack down on Chinese telecom and tech companies, was approved unanimously by the US Senate on October 28 and earlier in the month by the US House on a 420-4 vote.

The signing comes days before Biden and Chinese leader Xi Jinping are expected to hold a virtual summit. Reuters reported the meeting is expected Monday, amid tensions over trade, human rights and military activities.

The new law requires the Federal Communications Commission (FCC) to no longer review or approve any authorization application for equipment that poses an unacceptable risk to national security.

FCC Commissioner Brendan Carr said the commission has approved more than 3,000 applications from Huawei since 2018. The law “will help to ensure that insecure gear from companies like Huawei and ZTE can no longer be inserted into America’s communications networks,” Carr said.

In March, the FCC designated five Chinese companies as posing a threat to national security under a 2019 law aimed at protecting US communications networks.

The named companies included previously designated Huawei and ZTE, as well as Hytera Communications, Hangzhou Hikvision Digital and Zhejiang Dahua.

The FCC in June voted unanimously to advance a plan to ban approvals for equipment in US telecommunications networks from those Chinese companies even as lawmakers pursued legislation to mandate it.

The FCC vote in June drew opposition from Beijing.

“The United States, without any evidence, still abuses national security and state power to suppress Chinese companies,” Zhao Lijian, a spokesperson at China’s foreign ministry, said in June.

Under proposed rules that won initial approval in June, the FCC could also revoke prior equipment authorizations issued to Chinese companies.

Huawei in June called the proposed FCC revision “misguided and unnecessarily punitive.”

Last month, the FCC voted to revoke the authorization for China Telecom’s US subsidiary to operate in the United States, citing national security concerns.

© Thomson Reuters 2021

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T-Mobile to Settle US Probe Into 2020 Outage for $19.5 Million

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By Reuters | Updated: 24 November 2021

T-Mobile USA agreed to settle a US probe for $19.5 million (roughly Rs. 145 crore) after a massive 2020 outage led to more than 20,000 failed 911 emergency calls.

The settlement was prompted by a Federal Communications Commission investigation into a more than 12-hour outage in June 2020 that led to congestion across No. 3 wireless carrier T-Mobile’s networks, and caused “the complete failure of more than 23,000 911 calls.”

T-Mobile as part of the consent decree with the FCC has also agreed to make new commitments to improve 911 outage notices.

An October 2020 FCC report found the T-Mobile outage disrupted calling and texting services nationwide and access to data service in some areas. It resulted in at least 250 million total calls failing.

The FCC estimated “over 250 million calls … from other service providers’ subscribers to T-Mobile subscribers failed due to the outage” and “at least 41 percent of all calls that attempted to use T-Mobile’s network during the outage did not complete successfully.”

T-Mobile said Tuesday it has “built resiliency into our emergency systems to ensure that our 911 elements are available when they’re needed. Following this outage, we immediately took additional steps to further enhance our network to prevent this type of event from happening in the future.”

Then-FCC chairman Ajit Pai said the FCC staff report showed the company did not follow established network reliability best practices that could have potentially prevented or mitigated the outage.

The FCC report said the outage was caused “by an equipment failure and then exacerbated by a network routing misconfiguration that occurred when T-Mobile introduced a new router into its network.”

T-Mobile said earlier its network experienced an 18 percent reduction in completed calls during the outage but in the report acknowledged network congestion “likely required many of its subscribers to make 2-3 call attempts before successfully connecting.”

© Thomson Reuters 2021

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Telenor Partners With Google Cloud to Digitalise Its Global Operations

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By Reuters | Updated: 15 November 2021

Telenor and Alphabet’s Google Cloud have formed a partnership to digitalise the Norwegian telecom company’s global operations and are exploring ways to jointly offer services to customers, the two companies said on Monday.

The firms will not only use Google Cloud’s services to boost Telenor’s own IT and network, but also collaborate to provide Telenor’s customers with digital tools, their respective chief executives told Reuters.

Oslo-based Telenor serves 172 million customers with roughly half its revenue generated in Asia and half in the Nordics.

The digitalisation project will mean a big transformation for Telenor, but is also part of its ambition to find new revenue streams, Telenor’s CEO Sigve Brekke said.

“I think the future for telcos is to move beyond connectivity, and to create value on top of connecting customers,” he said.

With networks increasingly reliant on software, Telenor needs to build a cloud-based business, and Google’s abilities in providing data management knowledge, machine learning and artificial intelligence make it a good fit, Brekke added.

“To digitalise our operation is to make it smoother,” Brekke said. “You can predict outages before they happen… when you’re displacing some of your backend processes, you can smooth out customer experiences and make them better.”

Digitalising the core operations of a telecommunications company as large as Telenor is new to Google Cloud and so are the joint customer offerings, said Thomas Kurian, CEO at Google Cloud.

Among the first services the two envisage providing jointly is a platform to help small- and medium-sized enterprises (SMEs) transform to digital operations.

“This not just about optimising data centres and moving data centres to the cloud,” Kurian said.

“The work that we’re doing with SMEs…we are not just offering as a technology supplier, but building a joint offering to a customer segment.”

© Thomson Reuters 2021

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Brazil to Reschedule Auction for Unsold 5G Spectrum, Communications Minister Fábio Faria Says

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By Reuters | Updated: 6 November 2021

Brazilian Communications Minister Fábio Faria said on Friday that the government may schedule a new 5G spectrum auction to sell batches that did not attract interest, mainly in the 26GHz frequency.

Brazil telecom regulator Anatel concluded an auction on Friday with Faria saying in a news conference that the sale raised a total of BRL 46.79 billion ($8.44 billion or roughly Rs. 62,600 crores) including future capital expenditure commitments, making it the largest auction of telecom assets to date in Latin America.

Telecom Italia, Telefonica, and America Movil won most of the spectrum rights through their Brazilian subsidiaries in the final part of the auction on Friday, but local rival Algar Telecom also secured some.

Speaking to reporters in Brasilia, Faria said the government considered the auction successful, as the total value for the sold lots was around BRL 5 billion (roughly Rs. 6,700 crores) above minimum prices. The country now has six new telecom operators to compete with the larger companies, the minister added.

The minister and Anatel official Abraao Albino said the 26GHz spectrum did not attract interest due to uncertainties in the business model. The government will consider a new auction to offer the unsold batches.

© Thomson Reuters 2021

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Airtel Says It Added 8.1 Million 4G Users in Q2, Posts Higher Revenue on Data Usage

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By Reuters | Updated: 2 November 2021 

Indian wireless carrier Bharti Airtel reported a 13 percent rise in second-quarter revenue on Tuesday, boosted by additions in its 4G subscriber base, higher data consumption, and stronger revenue per user.

The company’s average revenue per user (ARPU) — a key performance indicator in the telecoms industry — came in at Rs. 153 for the second quarter, up from Rs. 143 a year ago. Rival Reliance Jio’s ARPU for the same period was Rs. 143.6.

Airtel, the country’s second-largest telecom firm by subscriber base, has benefited from higher user additions and a jump in data usage due to remote working trends during the COVID-19 pandemic.

It added 8.1 million 4G users in the second quarter from the previous quarter to touch 192.5 million subscribers — making it 60 percent of its overall customer case. Mobile data consumption, the company said, surged by 47.5 percent from a year ago.

The company had also undertaken some hikes in its tariffs earlier this year. In July, it scrapped the entry-level prepaid recharge of Rs. 49 and set the base plan at Rs. 79.

Airtel’s consolidated revenue from operations was Rs. 28,330 crore for the quarter ended September 30, compared with Rs. 25,060 crore a year ago, according to its exchange filing. Analysts on average had expected revenue of Rs. 27,770 crore.

Its net profit for the second quarter was Rs. 1,130 crore, compared with a loss of Rs. 760 crore in the same period last year.

Airtel, during the quarter, had also said it would invest Rs. 5,000 crore to expand its data centre business to meet customer demand in and around India.

© Thomson Reuters 2021

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Jio Profit Increases 24 Percent as Reliance Recovers from Pandemic Slowdown

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By Reuters | Updated: 23 October 2021

India’s Reliance Industries posted a 43 percent surge in second-quarter profit that exceeded market expectations on Friday, as rising demand and higher average selling price for oil products boosted its mainstay oil-to-chemicals business. The Mumbai-based conglomerate’s pandemic-hit energy and retail businesses are seeing a massive rebound with travel back in full swing and shoppers returning to stores as vaccination picks up pace in India.

Revenue from the oil-to-chemicals unit, home to both its refining and petrochemicals operations, rose 58.1 percent, also benefiting from higher transportation fuel margin.

With the lifting of lockdowns, business at its retail division, which consists of more than 12,000 stores and supermarkets, returned to pre-pandemic levels with revenue of 399.26 billion rupees.

“All our businesses reflect growth over pre-COVID levels,” said Chairman and Asia’s richest man Mukesh Ambani in a statement.

Reliance, India’s most valuable company, has in recent years invaded the retail and telecom sectors to tap into India’s consumer boom as it looks to reduce its dependence on its mainstay energy arm.

Reliance’s telecom unit Jio reported a 24 percent rise in profit, with a net addition of 23.8 million subscribers from a year ago.

The company said it would “soon” launch the low-cost smartphone it was developing with Google, after a delay due to an industry-wide chip shortage.

The company said consolidated profit rose to 136.80 billion rupees in the quarter ended September 30, from 95.67 billion rupees a year earlier.

Analysts, on average, had expected a profit of 134.65 billion rupees, according to Refinitiv data.

Overall revenue from operations rose 50 percent to 1.74 trillion rupees from a year earlier.

© Thomson Reuters 2021

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Huawei CFO Meng Wanzhou Leaves Canada After US Deal on Fraud Charges, Detained Canadians Head Home

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By Reuters | Updated: 25 September 2021

Huawei Chief Financial Officer Meng Wanzhou flew home to China on Friday after reaching an agreement with US prosecutors to end the bank fraud case against her, relieving a point of tension between China and the United States.

Within hours of the news of the deal, two Canadians who were arrested shortly after Meng was taken into custody in December 2018 were released from Chinese jails and were on their way back to Canada. Beijing had denied that their arrests were linked.

The years-long extradition drama has been a central source of discord in increasingly rocky ties between Beijing and Washington, with Chinese officials signalling that the case needed to be dropped to help end a diplomatic stalemate.

The deal also opens US President Joe Biden to criticism from China hawks in Washington who argue his administration is capitulating to China and one of its top companies at the centre of a global technology rivalry between the two countries.

Meng was arrested at Vancouver International Airport on a US warrant, and indicted on bank and wire fraud charges for allegedly misleading HSBC in 2013 about the telecommunications equipment giant’s business dealings in Iran.

In an exclusive on Friday, Reuters reported that the United States had reached a deferred prosecution agreement with Meng.

Nicole Boeckmann, the acting US attorney in Brooklyn, said that in entering into the agreement, “Meng has taken responsibility for her principal role in perpetrating a scheme to defraud a global financial institution.”

The agreement pertains only to Meng, and the US Justice Department said it is preparing for trial against Huawei and looks forward to proving its case in court.

China’s foreign ministry did not immediately respond to a request for comment on the release of Meng or the Canadians.

A spokeswoman for Huawei declined to comment.

A person familiar with the matter said Meng – the daughter of Huawei founder Ren Zhengfei – had left Canada on a flight to Shenzhen.

The two Canadians, businessman Michael Spavor and former diplomat Michael Kovrig, had been held in China for more than 1,000 days. In August, a Chinese court sentenced Spavor to 11 years in prison for espionage.

The International Crisis Group, where Kovrig works, said it was “overjoyed” at the “most just decision” to release him, thanking Canada and the United States for their roles. “The day we have been waiting for 1,020 days has finally arrived,” the advocacy group said in a statement.

Prime Minister Justin Trudeau told reporters in brief remarks late on Friday the two men had left Chinese airspace just minutes before. He was not asked whether the two countries had struck a bilateral deal.

“I want to thank our allies and partners around the world in the international community who have stood steadfast in solidarity with Canada and with these two Canadians,” he said.

At a hearing in Brooklyn federal court on Friday, which Meng attended virtually from Canada, Assistant US Attorney David Kessler said the government would move to dismiss the charges against her if she complies with all of her obligations under the agreement, which ends in December 2022. He added that Meng will be released on a personal recognisance bond, and that the United States plans to withdraw its request to Canada for her extradition.

Meng pleaded not guilty to the charges in the hearing. When US District Court Judge Ann Donnelly later accepted the deferred prosecution agreement, Meng sighed audibly.

A Canadian judge later signed Meng’s order of discharge, vacating her bail conditions and allowing her to go free after nearly three years of house arrest.

She was emotional after the judge’s order, hugging and thanking her lawyers.

Speaking to supporters and reporters on the steps of the court afterward, Meng thanked the judge for her “fairness” and talked of how the case had turned her life “upside down”.

Meng was confined to her expensive Vancouver home at night and monitored 24/7 by private security that she paid for as part of her bail agreement. Referred to by Chinese state media as the “Princess of Huawei,” she was required to wear an electronic ankle bracelet to monitor her movements, which became fodder for the tabloids when it hung above her designer shoes.

‘Huawei confidential’
Articles published by Reuters in 2012 and 2013 about Huawei, Hong Kong-registered company Skycom and Meng figured prominently in the US criminal case against her. Reuters reported that Skycom had offered to sell at least EUR 1.3 million (roughly Rs. 11,24,59,000) worth of embargoed Hewlett-Packard computer equipment to Iran’s largest mobile-phone operator in 2010.

Reuters also reported numerous financial and personnel links between Huawei and Skycom, including that Meng had served on Skycom’s board of directors between February 2008 and April 2009. The stories prompted HSBC to question Meng about Reuters findings.

Huawei was placed on a US trade blacklist in 2019 that restricts sales to the company for activities contrary to US national security and foreign policy interests. The restrictions have hobbled the company, which suffered its biggest revenue drop in the first half of 2021, after the US supply restrictions drove it to sell a chunk of its once-dominant handset business before new growth areas have matured.

The criminal case against Meng and Huawei is cited in the blacklisting. Huawei is charged with operating as a criminal enterprise, stealing trade secrets and defrauding financial institutions. It has pleaded not guilty.

A Canadian government official said Ottawa would not comment until the US court proceedings were over.

China vs USA
Huawei has become a dirty word in Washington, with China hawks in Congress quick to react to any news that could be construed as the United States being soft, despite Huawei’s struggles under the trade restrictions.

Then-President Donald Trump politicised the case when he told Reuters soon after Meng’s arrest that he would intervene if it would serve national security or help secure a trade deal. Meng’s lawyers have said she was a pawn in the political battle between the two super powers.

Republican China hardliners in Congress called Friday’s deal a “capitulation.”

“Instead of standing firm against China’s hostage-taking and blackmail, President Biden folded,” Republican Senator Tom Cotton said in a statement.

Senior US officials have said that Meng’s case was being handled solely by the Justice Department and the case had no bearing on the US approach to strained ties with China.

During US Deputy Secretary of State Wendy Sherman’s July trip to China, Chinese Vice Foreign Minister Xie Feng insisted that the United States drop its extradition case against Meng.

US officials have acknowledged that Beijing had linked Meng’s case to the case of the two detained Canadians, but insisted that Washington would not be drawn into viewing them as bargaining chips.

© Thomson Reuters 2021

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