Risk for Movistar, Personal and Claro in Argentina?

Huawei, the Chinese telecommunications giant in the midst of the global storm, is the main technology provider of Argentina's 4G network.

Indeed, he is responsible for 70% of the national telecommunications network and 100% of that located in the AMBA.

In the case of Movistar, the heart of its mobile phone network is also 100% owned by this Chinese company, as well as by the connectivity deployed between the provinces. As for Claro, the company has fiber optic extensions and microwave infrastructure, also provided by the same provider.

In addition, one third of the ARSAT fiber optic located in the center of the country is Huawei, a company also present in the new deployments to which, of this technology, several cable operators are faced in the country.

As you say, Much of the communications established in Argentina goes through the equipment of the largest technology company in China..

The data was provided by sources directly related to the company. For their part, the mobile operators have preferred not to delve into these details.

Of course, when you have to demonstrate future 5G networks, definitely indicate which provider they are facing in Argentina and around the world. This Thursday, Personal has decided to show the experience of its 5G network in a real environment with Huawei technology., at the DOT shopping center, in the district of Saavedra.

Given this scenario and the technological war that borders China and the United States on the outside, what side effects could occur in these pampas?

In Argentina, a company on wheels

"There is no impact today, if the project changes decision, it must do more of the electoral context than the world situation," said a source of business at iProfesional , adding: "In Argentina, the companies are really We have a totally fluid contact with the operators and we do not modify anything that could be related in any way to the conflict between China and the United States."

These days, the mobile operators have asked Chinese society about the situation, with the aim of directly understanding the prospects. But nothing more.

However, the subject is sensitive. So that no one wants to talk. The people consulted prefer the reservation. It's only during peak periods, it is best to observe and keep the profile low to avoid any unforeseen consequences.

Even international organizations badess the situation, depending on the route of the consultations that this media has done between them. No one has yet expressed its position, although some of them could begin to be known in the coming weeks.

Part of the caution is also that it's a conflict that goes beyond the industry. It is not that one supplier accuses another of a particular problem, or one company wants another to raise its investment profile in infrastructure. The political question goes beyond the rest.

The US-China conflict, centered on Huawei, has two aspects: on the one hand, telecommunications networks, on the other hand, mobile devices. The first is the most interesting at the local level, since the participation of the Chinese company in the mobile phone market is only 4%, according to data from Carrier y Asociados.

"It is not so easy to change network networking, nobody is interested in this situation, the only thing that generates a conflict of this type is to delay investment decisions made by the operators"he badured iProfessionnel an expert source of the market.

The informant pointed out that investment decisions in infrastructure are taken to five years, so that it is not possible to change the operator of the day on the next day. And that's because, in many cases, the same hardware vendors are the ones who finance some or a large part of that investment.

"These decisions are more financial than technological," he said.

In other words, hitting Huawei does not mean that its competitors – Ericsson and Nokia-Alcatel – end up benefiting from it, but that it also suffers the negative impact, because a scenario of uncertainty only delays decisions. .

Regarding the statement that Huawei's judgment will eventually have a negative impact on future 5G networks, it is also relativised by experts. They agreed that the three network providers are driving innovation at similar levels.

Huawei's participation in the global network infrastructure market is up to 40%, added one of the sources consulted.. This percentage is repeated at fairly similar levels in Latin America. The other manufacturers have the rest of the market in more or less equal proportions, 30% for Ericsson and another for Nokia.

In Argentina, investments in 4G networks of the three major mobile operators, Personal, Movistar and Claro, are underway. But in the mode "Argentine situation", that is to say, slower than the government wants it. The reason is the crisis that erupted more than a year ago, when the 100% devaluation occurred and Argentina entered a recession.

Thus, apart from the economic situation, is it possible to think of a change of scenario regarding Huawei's participation in Argentine networks?

One of the sources consulted developed several scenarios, with different levels of probability.

What would push mobile phone companies to abandon Huawei as a network provider?

1. Let the national government say that China is spying on us. "But we do not have the ability to determine that," the source said. It is only recently that the National Cybersecurity Strategy has been published in the Official Journal. And until its launch, it will be as long as the three years necessary to achieve this goal.

2. That, for business reasons, corporate groups appear which must make sure that their communications do not pbad through Huawei. He also has his difficulties.

3. That, for financing reasons, an investment bank seems to support the disbursements of an operator and that it requires that Chinese material not be purchased. Or before a debt refinance, a condition of this type is imposed.

4 That Brazil, fruit of the good relationship established by President Jair Bolsonaro with his Donald Trump, take a decisive decision with regard to Huawei and generate a domino effect in the region.

But, for the moment, the changes are speculative rather than real. It is worth emphasizing that Personal will show until the first Sunday of June the operation of a 5G connection based on the company's network equipment is. At this presentation already badisted the deputy head of government of Buenos Aires, Diego Santilli.

Huawei phones

What is the phones?

Here the story is different. Huawei has a small market share in Argentina compared to what is happening in the world and in the region.

According to data from Counterpoint Research, the company became the second largest manufacturer in the world after Samsung in the first quarter of the year. In this way, Apple was relegated to third place.

At the regional level, the company has very good market shares, like Colombia, where it holds a leading position. But this situation is not repeated at the local level.

As said, its market share is 4%. Last year, the company was faced with a new business process in the country and therefore stopped raising its phones in Tierra del Fuego.. That is to say that Huawei equipment sold in the country is 100% imported, confirmed the company.

In the future, we do not know yet how this will continue. It will depend a lot on how the situation evolves and the country's definition after the elections.

The only movements recently given by the company concerning products intended for the end-user relate to the opening of its official store in Mercado Libre, two months ago, where it sells accessories, some models of smartphones and home appliances that they integrate with the mobile phone.

In other words, the company maintains a minimum level of activity in the sector in which it does not occupy a leading position. Eastern patience.

The Chinese business world has always had very good relations with the Argentine government, beyond its political color. The good relationship with the Argentina-China Chamber has lasted for decades. The names of the business world are of use in this space.

In recent years, relations have been undermined to such an extent that today, cooperation agreements range from wine and meat to tango, through energy markets. and financial markets. Even the fence that the Ministry of Security inaugurated on May 30 was offered to the government by the People's Republic of China.

The United States, through their Secretary of State, Mike Pompeo, has insisted in recent hours that "Huawei be an instrument of the Chinese government." And he did so after the company filed a motion for summary judgment as part of the process of challenging the constitutionality of part of the National Defense Authorization Act ( NDAA) of 2019.

In this complex legal and political context, technology has once again called on the US government to stop the so-called defamation campaign against it.

The telecommunications world looks attentive, but keeps turning. Argentina too.

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