NEC to buy Swiss financial software firm Avaloq for $2.2 billion

TOKYO - Japan's NEC Corp. said on Monday it had agreed to buy Swiss financial software company Avaloq Group AG for 2.05 billion Swiss francs ($2.2 billion), a move that will spearhead its entry globally into finance software.

NEC will acquire unlisted Avaloq, Europe's top provider of financial asset management software, from private equity firm Warburg Pincus, which has a 45% stake and engineered the sale, and Avaloq's founder and employees.

Avaloq reported sales of 610 million Swiss francs ($664 million) last year, 70 percent of which came from Europe.

NEC has spent the last decade restructuring unprofitable units that lost business to price-competitive Asian rivals, selling its semiconductor, personal computer and smartphone units.

The company has since focused on providing governments and businesses with solutions services using its technologies in biometrics, healthcare, data analyses and telecommunications.

It recently received a 64.5 billion yen ($560 million) investment from Japanese telecoms company Nippon Telegraph and Telephone (NTT) to beef up its efforts to develop fifth-generation (5G) wireless technologies. 

NEC held around 400 billion yen ($3.8 billion) in cash and cash equivalents at the end of June. The deal is expected to be completed by April 2021 after necessary approvals.

-reuters-

Sweden's Ericsson sees 190 million 5G subscriptions by year end

STOCKHOLM - Sweden's Ericsson has almost doubled its global forecast for 5G mobile subscriptions to 190 million by the end of this year, due to faster than expected uptake in China.

The telecoms equipment maker, which had previously forecast 100 million subscriptions by the end of 2020, said it had made small downward adjustments for other parts of the world due to the coronavirus pandemic.

"For example, several spectrum auctions in Europe have been delayed, with a slower uptake of 5G subscriptions in the near term expected as a result," it said in its biannual Mobility Report.

Ericsson nudged down its 5G subscriptions forecast for 2020 and 2021 in North America, but maintained 2025 forecasts for both Europe and North America.

It also confirmed it had raised its forecast for global 5G subscriptions to 2.8 billion by 2025, or around 30 percent of all mobile subscriptions, from 2.6 billion previously.

"Despite the uncertainty caused by the pandemic, service providers continued to switch on 5G, and more than 75 of them have now announced commercial 5G service launches," Ericsson said.

The mobile network industry has faced waning demand for 4G and older network equipment, but 5G spending in North America has helped to fuel a return to growth.

Ericsson, which competes with China's Huawei and Finland's Nokia, said 4G would remain the dominant mobile access technology by subscriptions during 2020 to 2025, with 5.1 billion in 2022 and 4.4 billion expected by the end of 2025.

But in 2025, 5G networks will carry nearly half of the world’s mobile data traffic, it forecast.

The new generation of mobile phone technology will bring faster data speeds and support a greater variety of connected devices. 

-reuters-

Qualcomm says China virus threatens phone industry disruption

Qualcomm Inc raised concerns around the threat to the mobile phone industry's supply chain from the coronavirus outbreak in China, dragging down shares.

On a conference call with investors, Chief Financial Officer Akash Palkhiwala said Qualcomm expects "significant uncertainty around the impact from the coronavirus on handset demand and supply chain."

Shares fell 3.3 percent in after-hours trade.

The San Diego-based chip supplier forecast second-quarter revenue largely above Wall Street estimates on Wednesday, in the latest sign that a protracted slowdown in the global chip industry is easing.

Qualcomm is the world's biggest supplier of "modem" chips that connect mobile phones and other devices to wireless data networks. 

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US receives 130-plus license requests to sell to Huawei: sources

WASHINGTON -- The US Commerce Department has received more than 130 applications from companies for licenses to sell US goods to China's Huawei Technologies Co Ltd, three sources said, nearly two months after President Donald Trump said some sales would be allowed.

But the Trump administration has not yet granted any licenses for sales to the blacklisted company, said the people familiar with the process who spoke to Reuters on the condition of anonymity.

The standstill coincides with mixed messages from Trump in the US-China trade war, which have dimmed hopes for prompt decisions on license applications to sell to Huawei, the world's top producer of telecoms equipment.

That has raised the specter of billions of dollars of lost sales for chipmakers, software companies and others in Huawei's US supply chain.

"Nobody in the executive branch knows what (Trump) wants and they're all afraid to make a decision without knowing that," said William Reinsch, a former Commerce department official.

Last week, Trump vowed to raise tariffs on $550 billion in Chinese imports, hours after China imposed new levies on $75 billion in US goods. Then he softened his tone towards China at the G7 leaders' meeting over the weekend, saying he thought the world's two largest economies would reach a deal to end the tit-for-tat trade war that has roiled markets and hammered growth.

The current number of license applications, not previously reported, far exceeds the 50 or so that US Commerce Secretary Wilbur Ross disclosed receiving in July.

A spokesman for the Commerce Department said: "The interagency process, weighing license requests concerning Huawei and its non-US affiliates, is currently ongoing."

Huawei did not immediately respond to a request for comment but has called for the United States to remove the company from the so-called entity list and put an end to what it called "unjust treatment."

Huawei, the world's no. 2 smartphone maker, was placed on the list because of US national security concerns in May, when trade talks with China broke down. Sales of US goods are mostly banned to companies on the list, unless suppliers obtain special licenses, which must overcome tough scrutiny.

The United States says the company can spy on customers and has sought to convince allies to exclude it from 5G networks. Huawei denies the allegations.

PROMISE

Seeking to lure China back to the negotiating table in late June, Trump promised President Xi Jinping that US companies would be allowed to make some sales to Huawei, a gesture welcomed by U.S. chipmakers and software companies. Huawei spent $11 billion on US components from US firms such as Intel Corp, Qualcomm and Micron Technology last year.

Government officials urged US companies to apply for licenses following Trump's pledge of relief, saying exports to Huawei of non-sensitive items that are readily replaced by foreign competitors would be permitted. Ross and Trump in July promised timely responses.

One of the sources noted that the review process was not delayed, pointing to the complexities of interagency consultation.

But the only relief seen by Huawei thus far was the extension in August of the temporary general license, which gives US companies a small exception to repair and maintain Huawei's existing handsets and networks.

China expert Derek Scissors of the American Enterprise Institute said a breakthrough in US-China trade talks could spur license approvals for Huawei as soon as next month.

The two trade teams are due to meet in September in Washington, but no specific dates have been disclosed.

According to three Commerce department officials, many of the licenses requests have been reviewed by other agencies such as the Departments of State and Defense.

However, no standards have yet been set and no responses have been issued as officials await a green light from Ross and the White House, according to three people familiar with the process.

The United States has a case pending against Huawei over allegations Huawei violated US sanctions on Iran.

Huawei Chief Financial Officer Meng Wanzhou has been detained in Vancouver since December on US bank fraud charges for misleading banks about the company's Iran business. Trump has at times asserted that Huawei and Meng could be included in a grand US-China trade deal.

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US telecom titans and states align to mute 'robocalls'

SAN FRANCISCO -- A dozen telecom firms and state attorneys general from across the US agreed Thursday to a set of principles aimed at curbing illegal "robocalls."

Infuriating and often deceptive "robocalls" by the billions prompted US regulators to recently adopt new rules allowing carriers to implement tools to block calls with suspicious origins.

Principles crafted as voluntarily industry practices included wielding technology to block automated, mass-delivered calls from con artists or dodgy marketers.

"Robocalls are a scourge - at best, annoying, at worst, scamming people out of their hard-earned money," said North Carolina attorney general Josh Stein.

"By signing on to these principles, industry leaders are taking new steps to keep your phone from ringing with an unwanted call."

Telecommunications firms signing on to the eight principles agree to help states track down criminals behind frauds employing robocalls, according to Stein.

Under the principles, telecoms will use technology in their networks to figure out if calls are coming from legitimate sources and will monitor for robocall traffic.

The coalition of companies included AT&T, Comcast, Sprint, T-Mobile and Verizon, according to Stein's office.

"Few things can bring together policy leaders across the political spectrum like the fight against unwanted robocalls," Federal Communications Commission chairman Ajit Pai said in a statement.

"These principles align with the FCC’s own anti-robocalling and spoofing efforts."

Telecom technology has made it easy to create programs to make internet calls automatically to thousands, delivering spam messages and disguising numbers to make it seem as if the calls are from local residences or legitimate businesses.

According to mobile app maker Truecaller, fraud from robocalls cost Americans some $10.5 billion between April 2018 and April 2019.

YouMail, a firm which makes software designed to block unwanted calls, said Americans received a total of 48 billion robocalls in 2018.

The calls can be used to extract fraudulent payments, or obtain personal information for identity theft or other scams.

"Robocalls are so common because they are easy to make, very cheap, and they work," Alex Quilici, chief executive of YouMail, told AFP in a recent interview.

The epidemic of robocalls could have economic impact beyond those of the spam victims, by dissuading people from responding to legitimate or important calls.

The principles announced Thursday offer a comprehensive set of best practices to fight illegal and unwanted robocalls, said Columbia University computer science professor and former FCC chief technology officer Henning Schulzrinne.

"I hope that all parts of the telecommunication industry, both large and small, will commit to rapidly implementing these principles," he added.

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US government contractors get first look at Huawei ban

WASHINGTON - The U.S. agency responsible for government contracts on Wednesday released an interim rule for a ban on federal purchases of telecommunications equipment from five Chinese companies, including Huawei.

The ban is part of a broad U.S. push against Huawei Technologies Co Ltd, the world’s largest telecommunications network gear maker, which Washington accuses of espionage and stealing intellectual property.

Huawei has repeatedly denied it is controlled by the Chinese government, military or intelligence services. It has filed a lawsuit against the U.S. government over the restrictions in the defense policy bill.

The ban was included in the National Defense Authorization Act (NDAA) passed last year, and restricted the use of federal money to purchase telecommunications equipment and services and video surveillance equipment from "covered" telecommunications companies, citing national security concerns.

Huawei said in a statement that it "continues to challenge the constitutionality of the ban in federal court."

A spokesman for Hikvision, another of the five banned companies, said it is committed to complying with laws and regulations in countries where it operates. Hikvision "has made efforts to ensure the security of our products adhere to what is mandated by the U.S. government," the spokesman said.

Huawei and two of the other companies - ZTE Corp and Hytera - did not immediately respond to a request for comment on Wednesday. The fifth company, Dahua , could not immediately be reached for comment.

Government contractors have said they were confused about the scope of the ban and what it will mean for their businesses.

The first rule implementing the ban was posted on a website for contractors called Acquisition.gov run by the General Services Administration, the government agency responsible for contracting. The interim rule is slated to take effect on Aug. 13.

The government will accept comments on the rule for 60 days before it comes to a final version. It will allow agencies some ability to grant waivers through Aug. 13, 2021, for contractors where security is not at issue.

The broader ban, which will apply to contracts with any company that uses equipment from the companies, will take effect in August 2020.

In June, the White House Office of Management and Budget had asked Congress for two additional years to phase in the ban - a request that was quickly rebuffed by Republican national security hawks.

"The administration has a strong commitment to defending our nation from foreign adversaries, and will fully comply with Congress on the implementation of the prohibition of Chinese telecom and video surveillance equipment, including Huawei equipment," said Jacob Wood, a spokesman for the OMB.

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Huawei-built 5G network rolls out in Monaco, a first for Europe

MONACO -- Monaco on Tuesday became the first country in Europe to inaugurate a next-generation 5G mobile phone network based on technology from Chinese firm Huawei, which is seen by the US as a major security risk. 

As mobile operators shift away from slower 3G and 4G networks, Europe has been torn over its approach to the Chinese giant, which is a pioneer in 5G technology.

Offering super-fast wireless access, 5G mobile networks offer much greater data transfer speeds.

In September, Monaco Telecom, which is owned by French billionaire Xavier Niel, signed an agreement with Huawei to make the tiny principality the first country in Europe fully covered by 5G.

"We are the first state to be entirely covered by a 5G network," said Monaco Telecom president Etienne Franzi at the inauguration ceremony.

"In Monaco, the 5G is the promise of a better quality of life for all and exceptional opportunities," added the principality's head of digital transition Frederic Genta.

For Huawei vice president Guo Ping, the rollout in Monaco is a major opportunity despite the small size of territory covered.

"It allows us to make a shop window in a number of areas, notably linking 5G development to this intelligent state.

"It can serve as a model for other operators and states," he added. 

CONTROVERSIAL PARTNER

Speaking to AFP in May, Monaco Telecom's director general Martin Peronnet defended the decision to work with the Chinese supplier. 

"There are many countries and operators that are in the process of finalizing a 5G rollout with Huawei or who have already done so," he said.

Ahead of the deployment, the operator worked to update its network equipment and deploy 5G-compatible antennae, stressing that it had put in place the necessary security measures to protect its systems. 

Huawei's involvement in the roll-out of 5G networks has become an increasingly political issue after Washington raised concerns over potential security risks and pushed its closest allies to reject the Chinese firm. 

US intelligence agencies believe Huawei is backed by the Chinese military and that its equipment could provide Beijing's intelligence services with a backdoor into the communications networks of rival countries.

Huawei has denied the claims, and so far, Washington has offered no evidence for its concerns. 

The company says it has signed 50 contracts worldwide, including 28 with European operators, for 5G.

South Korea has already announced complete nationwide 5G coverage while in Europe smaller nations like Switzerland, Finland and Estonia have only just started deploying the technology.

Germany is only now handing out frequencies to operators and France should follow in the final quarter of the year.

In May, Washington moved to block Huawei from the US market and banned the export of US technology and materials to the firm in the latest salvo in a monumental economic showdown between the two superpowers.

Last month, an internal report by the GSM Association, which represents mobile network operators around the world, found that banning Huawei and fellow Chinese equipment maker ZTE from Europe's 5G roll-out would cost European operators up to 55 billion euros ($62 billion).

It would also slow down the roll-out of 5G networks in Europe and lead to reduced take-up, which would further increase the productivity gap between the EU and the US, the report said. 

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Trade breakthrough reopens US business with Huawei

WASHINGTON — The Trump administration is following through with plans to allow US companies to continue doing business with Huawei, the Chinese telecom equipment giant, just weeks after placing the company on a Commerce Department blacklist.

On Tuesday, Commerce Secretary Wilbur Ross said the administration would issue licenses for US companies that want to do business with Huawei “where there is no threat to national security.”

The comments confirm President Donald Trump’s surprise announcement last month, after meeting with Chinese President Xi Jinping, that the United States would relax restrictions on Huawei as part of an effort to restart stalled trade talks with China. Weeks earlier, the Commerce Department said it had placed the company and dozens of affiliates on a list of firms deemed risks to national security, effectively barring it from buying American parts and technologies without seeking US government approval.

Larry Kudlow, director of the White House National Economic Council, said at a CNBC event Tuesday that the United States “opened the door — relaxed a bit, the licensing requirements from the Commerce Department” for companies that sell to Huawei.

“We are opening that up for a limited time period,” Kudlow said.

That could offer a reprieve to US companies like Qualcomm, Intel, Broadcom and Google, which sell microchips to Huawei and other specialized parts that go into its smartphones and telecom equipment.

US technology companies have been lobbying the administration, saying that the ban will cut them off from a major source of revenue, while doing little to hold back Huawei’s technological advancement, since Huawei will merely purchase some less-advanced components from competitors in Japan, South Korea or elsewhere instead.

Kudlow also said negotiations with China, which fell apart in May and seemed on the brink of collapse, are set to resume.

On Tuesday, Robert Lighthizer, the US trade representative, and Treasury Secretary Steven Mnuchin spoke with Chinese Vice Premier Liu He and Minister Zhong Shan to continue negotiations aimed at resolving the outstanding trade disputes between the United States and China, according to a senior administration official. Both sides will continue these talks as appropriate, the official said.


2019 New York Times News Service

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No Huawei ban in Dutch 5G rollout - government

AMSTERDAM - The Dutch government will force telecoms companies to vet their equipment suppliers more thoroughly as they roll out 5G mobile networks, but made no mention of banning China's Huawei or any other supplier over spying fears.

In a letter to parliament, Justice Minister Ferd Grapperhaus said a task force set up to examine the threat from state-backed spying in 5G networks had concluded that was a "sufficient answer to the threat".

While the Dutch intelligence agency AIVD has issued several warnings this year about Chinese and Russian spying, a key advisory body last week said the Dutch should follow Britain and Germany's lead and not exclude Huawei completely.

Grapperhaus said the task force carried out a risk assessment with the three big Dutch telecommunications providers, KPN, T-Mobile and VodafoneZiggo.

Dutch telecoms companies will now have "extra high standards" for equipment suppliers, he said.

Grapperhaus ordered an inquiry last week when telecoms company KPN suffered a nationwide network outage that knocked out emergency service numbers for nearly four hours.

(Reporting by Toby Sterling Editing by Keith Weir)

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5G future on display with robots, AI at China tech fair

SHANGHAI -- The near future where robots take charge of mundane tasks like grocery shopping to helping doctors save lives was on display in this Chinese financial hub on Wednesday, all powered by the upcoming 5G standard that promises to transform the way people interact with technology.

This year's Mobile World Congress was a display of practical applications of 5G, which Chinese tech titans are selling to the world, despite opposition from the US.

The biggest exhibitors include Huawei, the world’s largest manufacturer of telecom infrastructure and number two smartphone maker that was blacklisted by Washington, compatriots Vivo and Oppo, chipmaker Qualcomm and carriers China Telecom and China Unicom.

Compared to 4G or LTE, 5G promises faster data transfers and at larger volumes at a time. In the home, it can help power smart devices such as virtual assistants housed in speakers and ultra high definition television and gaming.

It can be used by autonomous vehicles to carry both people and cargo, automating both transportation and logistics.

Big data can harness 5G speeds to aid doctors in diagnosis and treatment. Another application allows users to pay for their groceries without passing through the check out counter since the computing is done on the cloud.

One 5G-powered robot was controlled using a glove with sensors, reminiscent of the big robot cartoon "Daimos" that was popular in the 1980s.

Another robot, its body shaped like that of a woman, interacted with visitors as it danced.

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Facebook stops app pre-installs on new Huawei phones: report

MANILA -- Facebook no longer allows Huawei to pre-install its suite of apps on new devices, as US companies comply with Washington's blacklisting of the Chinese tech giant, Reuters reported Friday.

Customers who already have Huawei phones can still use and update the apps on its devices, but new units will no longer be able to have Facebook, WhatsApp and Instagram pre-installed, according to the social networking giant.


The Facebook ban applies to any Huawei phone that has not yet left the factory, Reuters reported, citing a person familiar with the matter. Facebook declined to comment on when the suspension took place.

Google, based in the US like Facebook, earlier said it would no longer provide Android software to Huawei phones after a 90-day reprieve ends in August. Google's Playstore and apps will remain available to current Huawei models.

Washington has long accused Huawei of being a security risk due to its close ties to Beijing, something the Shenzhen-based firm has denied.

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Huawei’s European customers on hold due to US ban

LONDON — Europe has been one of Huawei’s biggest success stories. Now it is on the front line of the trade and technology war between China and the United States.

The move by Google this week to cut off Android support to phones made by Huawei, the Chinese telecom giant, will hobble their European users and highlights how deeply the Continent relies on US and Chinese companies for gadgets, apps and internet services.

From its early days selling equipment to wireless carriers, Huawei has expanded at an extraordinary rate in Europe, capturing more than a quarter of the smartphone market. Google’s action is “potentially catastrophic” for Huawei’s hopes in Europe, said Ben Stanton, a senior analyst at Canalys, a research firm.

The Trump administration’s order this month barring US telecommunications firms from using foreign-made equipment that could pose a threat to national security — exactly what Washington has accused Huawei of doing — is likely to have a knock-on effect on smartphone users’ experience. Google Maps and other apps, for example, will not be supported.

European customers will be hit harder than those in the United States or China. Huawei phones are largely unavailable in the United States, and Google’s services have long been blocked in China by the government.

But they are best sellers in countries like Greece, Portugal and Spain. Those phones, plus robust sales of telecommunications equipment, have made the market covering Europe, the Middle East and Africa into Huawei’s second biggest after China. It accounted for 28 percent of Huawei’s revenue in 2018, compared with 7 percent from the Americas.

The pressure has mounted. Since the administration’s order, one company after another has moved to suspend business with the company, which is the world’s second-largest smartphone maker, after Samsung.

Google announced its pullback Monday. The Commerce Department said it would grant a 90-day extension for companies to work out how to support existing cellular networks and handsets, but Google said it planned to abide by the ruling once the time expired.

On Wednesday, two British carriers, EE and Vodafone, said they would not offer Huawei phones to customers who wanted access to their new 5G services. Two of Japan’s largest mobile carriers also said they would delay the debut of a new smartphone by Huawei.

Huawei will be unable to recover quickly, analysts said.

“It would be extremely unlikely that they would use their own operating system here in the short term,” said Dario Talmesio, a telecommunications analyst at Ovum, a research and consultancy firm in London. “And that means people with existing Huawei devices will gradually see devices that are reliant on Android deteriorate because they are not able to perform certain upgrades.”

Customers shopping for a handset are unlikely to buy one that doesn’t come with Google’s latest version of Android, apps like Gmail or the Play app store. The drop in demand for Huawei phones could also hurt European carriers that are “very heavily relying on the quality, with fairly low cost, of Chinese devices” to get customers onto the new hyperfast networks that are on the horizon, Talmesio said.

Huawei’s bottom line could suffer from the loss of sales of its more expensive phones, with their high profit margins, said Steve Tsang, the director of the China Institute at the School of Oriental and African Studies in London. And the diminished prospects in Europe may hinder Huawei’s ability to expand elsewhere.

“Being able to make it in Europe means that it is a lot easier for Huawei to make it in the rest of the world,” Tsang said. “Success in Europe is significant for Huawei, both in terms of revenue and in terms of future growth.”

To succeed in Europe, Huawei made a sustained effort over nearly two decades to work with network operators and allow governments to test its equipment for security flaws. Huawei first made inroads by providing cheap gear to build phone networks in countries including Britain, Germany, France and Poland. The company became the world’s largest seller of telecom equipment, besting Nokia and Ericsson.

Huawei deepened its reach when it began selling mobile devices, first as low-cost alternatives to a Samsung Galaxy or an Apple iPhone and then with pricier models respected for their technology. Huawei gives carriers and retailers better financial terms than rivals by allowing them to make money from every handset sale. Industry analysts said retailers had an incentive to display and promote Huawei phones.

The strategy helped Huawei sell more than 42 million smartphones in Europe last year, according to Canalys. “Huawei has been the darling of the European smartphone industry for the last three or four years," Stanton of Canalys said.

Huawei's growth highlights how Europe's influence in tech has faded.

European policymakers have been trying to nurture the region’s technology sector, which played an important role in the growth of the global tech industry. Finland’s Nokia was once the world’s largest seller of mobile phones, and Skype, founded by Scandinavians, helped pioneer the now-common ability to make calls over the internet. But Europe could not keep up with Silicon Valley or Shenzhen, where Huawei has its headquarters.

For months, Washington has been warning allies of security risks associated with Huawei, but several balked at its assessment. The Trump administration has threatened its intelligence-sharing relationship with Germany, Britain and other allies as Huawei sought to build their fifth-generation, or 5G, networks. The networks promise not only faster cellular service but also better wireless connections for “internet of things” devices like autonomous cars, security cameras and industrial equipment.

The Trump administration’s order moved the debate about Huawei beyond the more obscure equipment needed to make wireless networks to which handsets consumers can buy and apps they can use.

“It’s not in our control,” said Talmesio at Ovum. “We are stuck in the middle of this commercial war, and we are becoming very much a kind of proxy war territory.”

Google’s decision surprised potential phone buyers in Europe, and many were hesitating. Security risks were not their worry. They wanted to know that their phones would work anywhere.

“Such applications as YouTube and Google Maps, they are vital,” said George Kirmizidis, a civil servant browsing at a BASE mobile phone shop in Brussels. “If I cannot access those through my smartphone, what’s the point of buying a smartphone altogether?”

“As a customer, of course I would like to have the choice to choose between different products, and now Huawei is out of the market for me,” Kirmizidis, 44, added. “I have a limited choice of products, which is not fair if we support capitalism.”

Solongo Unurbat was examining a Huawei phone priced at more than $1,000 in the Mall of Berlin, and the 34-year-old was not concerned about the loss of Google functionality.

“For me, it’s all about the camera, ” she said.


2019 New York Times News Service

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Qualcomm shares slide after US antitrust ruling

WASHINGTON - Smartphone chip giant Qualcomm suffered a fresh blow in its antitrust battle with a US federal judge's ruling that it "strangled competition" for years at the expense of consumers and device makers.

Shares in Qualcomm sank some eight percent in opening trading Wednesday after the ruling that the company violated antitrust law, in a case with major implications for the smartphone market.

Judge Lucy H. Koh of the northern district of California ordered Qualcomm to change its pricing and sales practices, after finding it "engaged in anticompetitive conduct" towards customers like Sony, Samsung and China's Huawei.

"Qualcomm's licensing practices have strangled competition" in the chip market for years, "and harmed rivals," she said in the ruling Tuesday in the lawsuit brought by the US Federal Trade Commission.

She added that Qualcomm's abusive tactics have been continuing and that it "is likely to replicate its market dominance during the transition to 5G, the next generation of modem chips."

The California-based company's shares had soared after reaching a settlement with Apple last month over royalty payments for chips used in smartphones, which was expected to generate a windfall of $4.5 billion.

But the 230-page ruling showed the company violated the law by using "unfair methods of competition."

The company said it will seek an expedited appeal of the ruling.

"We strongly disagree with the judge's conclusions, her interpretation of the facts and her application of the law," Don Rosenberg, Qualcomm executive vice president and general counsel, said in a statement.

Koh cited statements from company executives that showed the "unlawful practices are 'ongoing' or likely to recur" since they were part of the firm's strategy and it maintains a dominant position in the market.

The judge ruled that Qualcomm must negotiate terms for its patents on fair and reasonable terms without using threats or discriminatory tactics.

"Qualcomm must not condition the supply of modem chips on a customer's patent license status and Qualcomm must negotiate or renegotiate license terms with customers in good faith under conditions free from the threat of lack of access," the judge wrote.

John Bergmayer of the consumer group Public Knowledge said of the decision: "We congratulate the FTC on this important victory. Judge Koh's ruling shows that the FTC has the ability to bring, and win, important cases that protect American consumers."

The ruling marked the latest setback for Qualcomm which has faced antitrust litigation in Europe, South Korea and China.

Qualcomm's woes appeared to ease earlier this month when it agreed with Apple to settle all worldwide litigation in what had been a sprawling battle over royalty payments.

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Huawei founder says US underestimates company, 'can't be isolated'

BEIJING -- Huawei founder Ren Zhengfei struck a defiant tone Tuesday against US attempts to block his company's global ambitions, saying the US "underestimates" the telecom giant's strength.

Ren spoke to Chinese state media days after President Donald Trump issued orders aimed at thwarting Huawei's business in the United States, capping months of efforts to stop the company's bid to become the world leader in next-generation 5G technology.

"The current practice of US politicians underestimates our strength," Ren said, according to CCTV.

"Huawei's 5G will absolutely not be affected. In terms of 5G technologies, others won't be able to catch up with Huawei in two or three years," he said.

Last week, Trump declared a "national emergency" empowering him to blacklist companies seen as "an unacceptable risk to the national security of the United States" -- a move analysts said was clearly aimed at Huawei.

At the same time, the US Commerce Department announced the effective ban on American companies selling or transferring US technology to Huawei.

But the Commerce Department on Monday issued a 90-day reprieve on the ban on the transfer of technology.

"The US 90-day temporary licence does not have much impact on us, we are ready," Ren said.

Half of chips used in Huawei equipment come from the United States and the other half are made by the Chinese company, he said.

"We cannot be isolated from the world," Ren said.

"We can also make the same chips as the US chips, but it doesn't mean we won't buy them," he added.

ASK TRUMP, NOT ME

The Huawei confrontation has been building for years, as the company has raced to a huge advantage over rivals in next-generation 5G mobile technology.

US intelligence believes Huawei is backed by the Chinese military and that its equipment could provide Beijing's intelligence services with a backdoor into the communications networks of rival countries.

For that reason, Washington has pushed its closest allies to reject Huawei technology, a significant challenge given the few alternatives for 5G.

The battle over Huawei has added to tensions in a trade war that has escalated between the world's top two economies, with both sides exchanging steep increases in tariffs as negotiations have faltered.

Asked how long Huawei may face difficult times, Ren said: "You may need to ask Trump about this question, not me."

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US blocks China Mobile, citing national security

WASHINGTON, United States - US regulators on Thursday denied a request by China Mobile to operate in the US market and provide international telecommunications services, saying links to the Chinese government pose a national security risk.

The Federal Communications Commission said that because of China Mobile USA's ownership and control by the Chinese government, allowing it into the US market "would raise substantial and serious national security and law enforcement risks." 

The decision brings the Chinese telecoms giant's 8-year effort to crack the US market to an end, but was not really a surprise since FCC Chairman Ajit Pai had publicly opposed the company's application last month.

China Mobile -- the world's largest mobile operator with nearly 930 million customers as of February -- first filed an application for permission to operate in the United States in 2011.

The 5-member FCC said in a statement that the decision was made after "extensive review" and "close consultation" with national security and law enforcement agencies.

It also marks the first instance in which executive branch agencies have recommended that the FCC deny an application due to national security and law enforcement concerns, the statement said.

The move comes as Chinese tech firms -- such as Huawei and ZTE -- have faced stiff resistance from US government agencies, which have described them as security threats.

WIDER TRADE BATTLE

ZTE came close to collapse last year after American companies were banned from selling it vital components over its continued dealings with Iran and North Korea.

Federal authorities unveiled sweeping charges against Huawei in January for allegedly stealing technology and violating US sanctions on Iran.

The company has also been under fire as it faces a global US campaign to blacklist Huawei over espionage fears.

Washington has barred the Chinese networking equipment company Huawei from developing the new ultra-fast 5G mobile network in the United States and has blocked US government purchases of its services.

Defense of intellectual property in China and getting fair access to that country's markets have long been points of concern for US tech companies. They are also considered hard-to-fix problems when it come to trade between the US and China.

Meanwhile, technology has become increasingly vital to national security and economies.

Denial of the China Mobile request came as US President Donald Trump held out hopes of salvaging a trade deal with China, just hours before Beijing's negotiators were due to return to the bargaining table amid a sudden flare-up in hostilities.

Since last year, the 2 sides have exchanged tariffs on more than $360 billion in 2-way trade, gutting US agricultural exports to China and weighing on both countries' manufacturing sectors.

The International Monetary Fund also repeated its warning on Thursday that the trade battle between the world's top economies was a "threat" to global growth.

source: news.abs-cbn.com

Who Owns Huawei? The Company Tried to Explain

SHENZHEN, China — For one of the world’s largest technology companies, it should be a simple question:

Who owns Huawei?

As the Chinese smartphone and telecommunications equipment giant battles the US government over whether it should be allowed to build the world’s mobile networks, the company has been going to great lengths to present itself as open, transparent and trustworthy.

It has not always worked out. One reason is that certain simple questions about Huawei do not have simple answers.

The chief secretary of Huawei’s board of directors, Jiang Xisheng, spoke for more than 90 minutes to a small group of reporters Thursday. The goal was to help explain the company’s ownership after two American researchers wrote a report accusing Huawei of being misleading about the issue.

Jiang’s explanation boiled down to this: On paper, he said, Huawei is owned by a labor union that solicits donations from employees when their colleagues have health problems and the like. The union also supervises the company basketball club, Jiang said.

Naturally, it is a little more complicated than that.

Huawei’s ownership is a murky matter because the company has never, in more than three decades of existence, sold shares to the public. The firm says it is entirely owned by its employees, and that no outside organizations, including any affiliated with the Chinese government, own shares.

But these assurances have never quite dispelled US officials’ suspicions that Beijing and the Communist Party are somehow pulling the strings. Top US officials have also been alarmed by new Chinese laws that require companies to assist in national intelligence work.

Huawei on Thursday showed reporters what it described as evidence of its independence: a big blue book, kept behind glass and under lock and key in a drab white room at the company’s headquarters in Shenzhen, the southern Chinese city.

Within its 10 volumes are said to be the names of all the Huawei employees who hold so-called “restricted phantom shares” in the company — proof, the company says, that no piece of Huawei is owned by the Chinese government.

This, too, is not as simple as it seems.

Over the past year, Washington’s long-simmering distrust toward Huawei, the world’s leading maker of the equipment that powers cellphone networks, has morphed into an all-out assault on the company.

Huawei and its chief financial officer, Meng Wanzhou, are facing criminal charges in the United States related to theft of trade secrets and violations of sanctions on Iran. US officials have urged other governments to bar mobile carriers from using Huawei’s gear in their next-generation wireless networks, arguing that oceans of sensitive data could be exposed to Chinese intelligence-gathering.

To counter claims that it is opaque and secretive, Huawei recently reported quarterly financial results for the first time. And it has invited reporters from around the world to interview company leaders, including Ren Zhengfei, its powerful founder and chief executive.

But to Huawei’s critics, such gestures hardly put to rest the question of whether the company is susceptible to Chinese state influence.

China’s government exerts control over the country’s private businesses in many ways, some of them unofficial and never disclosed. Huawei executives have said repeatedly that they do not act on Beijing’s behalf. But absent the kind of constant, independent scrutiny that a publicly listed company would face, outsiders can only decide whether to take Huawei’s word for it.

“It’s hard to prove if you’re not at least a partially publicly traded company,” said Xiaomeng Lu of Access Partnership, a policy consulting firm.

By exposing themselves to the vetting needed to list their shares on American stock exchanges, Lu said, other Chinese technology firms have put the wider world at greater ease about the way they are run.

“That’s a kind of seal of approval,” she said.

Huawei, however, believes it has flourished because it does not face the short-term financial pressures that publicly held companies do. And so, the company has devised an ownership structure that allows it to use shares to motivate employees while still remaining closely held.

Here is where it gets complicated.

According to Chinese corporate records, Huawei Technologies is wholly owned by a holding company called Huawei Investment & Holding.

That holding company has two shareholders, corporate records say. Ren, Huawei’s chief executive, owns a little more than 1 percent of shares. The rest are owned by an entity called the Union of Huawei Investment & Holding.

This is Huawei’s labor union, Jiang said Thursday, and it owns most of the company purely out of legal convenience. Under Chinese law, only certain kinds of entities can be the registered owners of a closely held company, and a labor union is one of them.

The union has no influence over the company’s business operations, Jiang said. It does, however, supervise after-work activities for employees.

That basketball club, for instance. The badminton and table tennis clubs, too, Jiang said.

Huawei’s union is registered with the Shenzhen city government’s union and pays dues. But the municipal union has no influence over the Huawei union’s operations or the company, Jiang said.

What, then, does Huawei actually mean when it says that it is employee-owned? Jiang described the company’s program for allowing workers to own a kind of virtual Huawei stock.

Shares of this virtual stock let employees share in the company’s financial success (and its losses). And they entitle their holders to elect members to Huawei’s Representatives’ Commission, which in turn elects members of the board of directors.

Technically, all of this is separate from the union, which is the company’s registered legal owner. Huawei’s virtual shares also differ from conventional shares in key ways.

They cannot, for instance, be transferred to others or owned by nonemployees. And if an employee leaves Huawei, the company buys the shares back, unless the employee has reached a certain level of seniority.

The researchers who wrote the report questioning Huawei’s ownership — Christopher Balding, a professor at Fulbright University Vietnam, and Donald C. Clarke, a Chinese law expert at George Washington University — say that Huawei’s virtual stock program “has nothing to do with financing or control” and is “purely a profit-sharing incentive scheme.”

Jiang rejected this argument, saying that holders of Huawei virtual shares bear the risk that their shares will decline in value, and that they are entitled to a portion of the company’s assets if it goes bankrupt.

Still, he acknowledged Thursday that it was unclear whether Huawei’s efforts to explain all this would assuage any concerns in Washington.

“With some people,” he said, “no matter what you say to them, they will only say what they want to say. They won’t listen to you.”

c. 2019 New York Times News Service

source: neews.abs-cbn.com

Huawei to launch 5G at Africa Cup of Nations

CAIRO -- Huawei will roll out 5G phone network for the first time during this summer's Africa Cup of Nations, Egypt's minister of communications and information technology said on Sunday.

The Shenzhen-based company will introduce the technology at the 74,000-capacity Cairo International Stadium which is set to host 10 games including the final during the competition.

"Egypt wishes to cooperate with Huawei in the field of artificial intelligence, technology transfer and with 5G," Amr Talaat said.

Huawei is the leading manufacturer of equipment for next-generation 5G mobile signal with almost instantaneous data transfer that will become the nervous system of Europe's economy, in strategic sectors like energy, transport, banking and health care.

However, some Western nations have barred it amid fears Beijing could gain access to sensitive communications and critical infrastructure but Huawei denies all these accusations.

The biennial Cup of Nations takes place between June 21 and July 19 in the north African country.

Defending champions and original hosts Cameroon are in a tricky group alongside Ghana, Benin and Guinea-Bissau.

Egypt was awarded the staging rights in January, following the decision to strip Cameroon of the finals due to delays in preparation.

source: news.abs-cbn.com

US, China leading race for 5G wireless: survey

WASHINGTON - The United States and China are in a virtual deadlock in the race for 5G, or fifth-generation wireless networks expected to unlock new services, an industry survey showed Tuesday.

The report shows the United States has closed the gap with China in "readiness" for the ultrafast wireless systems and has more 5G deployments planned in 2019 than any other country.

The study for the wireless industry group CTIA and conducted by the research firm Analysys Mason showed the US moved ahead of South Korea in 5G readiness over the past year to a virtual tie with China, as a result of considerable investment in 5G systems.

CTIA president Meredith Attwell Baker said in a statement that the United States has made "impressive strides" in preparing for the new technology but that more is needed to maintain leadership. 

"We can't be complacent as the 5G race has really just begun," she said.

"We must redouble our efforts to combat the 5G ambitions and investments by China and others."

Analysts expect 5G networks to play a crucial role in delivering data for autonomous vehicles, remote medicine and other services with heavy data usage.

US officials have sought to block Chinese firms such as Huawei from deploying 5G systems on national security grounds, raising concerns that this will slow the rollout of high-speed networks.

Officials have also floated the idea of a government-backed 5G network which could be more secure against foreign espionage, an idea roundly opposed by the telecom industry.

According to the report, the US leads with 92 commercial 5G deployments planned for 2019 but noted that China's wireless operators are conducting "hundreds of large-scale 5G trials across the country."

"China retains a significant infrastructure advantage," the report said. "A recent study showed China with more than 14 wireless cell sites per 10,000 people, compared to 4.7 in the United States."

The report said to maintain growth in 5G, the US needs to do more to allocate wireless spectrum, in some cases reassigning bands now used for other purposes.

According to the survey, South Korea ranked third in 5G readiness, followed by Japan, Britain and Italy.

source: news.abs-cbn.com

Apple infringed three Qualcomm patents, jury finds

Mobile phone chip supplier Qualcomm Inc on Friday won a legal victory against iPhone maker Apple Inc, with a jury in federal court in San Diego finding that Apple owes Qualcomm about $31 million for infringing three of its patents.

Qualcomm last year sued Apple alleging it had violated patents related to helping mobile phones get better battery life. During an eight-day trial, Qualcomm asked the jury to award it unpaid patent royalties of up to $1.41 per iPhone that violated the patents.

The $31 million penalty is small change for Apple, the second most valuable U.S. company after Microsoft Corp, with a market value of $866 billion and annual revenue totaling hundreds of billions of dollars. But the setting of a per-phone royalty rate for Qualcomm's technology gives the chip supplier a fresh line of attack in its two-year old legal battle with Apple.

The biggest case, filed by Apple in early 2017, begins in April. Apple has sought to dismantle what it calls Qualcomm's illegal business model of both licensing patents and selling chips to phone makers. Qualcomm has accused Apple of using its technology without paying.

"The technologies invented by Qualcomm and others are what made it possible for Apple to enter the market and become so successful so quickly," Don Rosenberg, Qualcomm's general counsel, said in a statement. "We are gratified that courts all over the world are rejecting Apple's strategy of refusing to pay for the use of our IP."

In a statement, Apple said it was disappointed with the outcome.

"Qualcomm's ongoing campaign of patent infringement claims is nothing more than an attempt to distract from the larger issues they face with investigations into their business practices in U.S. federal court, and around the world," Apple said. It declined to comment on whether it would appeal.

In other cases against Apple, Qualcomm has won sales bans on iPhones in Germany and China, though the Chinese ban has not been enforced and Apple has taken moves it believes allow it to resume sales in Germany.

Qualcomm also suffered a setback with U.S. trade regulators who found that some iPhones infringed one of the San Diego-based company's patents but declined to bar their importation into the United States, citing the damage such a move would inflict on rival Intel Corp.

The verdict on Friday could come into play in the trial in April because it puts a per-phone dollar figure on some of Qualcomm's intellectual property. Qualcomm's patent licensing model relies on charging phone makers a cut of the selling price of the phone, a practice Apple has alleged is unfair and illegal.

During an earlier trial between Qualcomm and the U.S. Federal Trade Commission, Apple executives outlined their company's extensive negotiations to reduce those license fees to $7.50 per phone for Qualcomm's patents.

The San Diego jury valued just three of Qualcomm's patents in the company's portfolio at $1.41, a figure that the chip supplier believes bolsters its contention that its licensing practices are fair.

"The three patents found to be infringed in this case represent just a small fraction of Qualcomm's valuable portfolio of tens of thousands of patents," Rosenberg said in a statement.

Gaston Kroub, a patent lawyer in New York not involved in the case, said the verdict was clearly a win for Qualcomm. But it does not say much about the value of Qualcomm's entire patent portfolio and was unlikely to spark settlements discussions, he said.

"Apple is very skilled at handling appeals and taking a longer-term view. This isn't something that will bring Apple to the table with any sense of urgency," Kroub said. 

source: news.abs-cbn.com

China says Canadian stole secrets; Huawei to sue US

BEIJING/OTTAWA -- China's government and its leading smartphone maker, Huawei Technologies Ltd, stepped up pressure on Monday on the US and Canadian governments in a dispute over trade and telecoms technology that has ensnared Huawei's CFO, who faces US criminal charges.

China on Monday accused detained Canadian citizen Michael Kovrig of stealing state secrets passed on to him from another detained Canadian, businessman Michael Spavor, in a move likely to increase tension between Ottawa and Beijing.

The telecom gear maker is also preparing a lawsuit against the US government over a law that restricts its market access.

It was the latest escalation of an unprecedented crisis for Huawei, the world's largest telecommunications equipment maker and No. 2 manufacturer of smartphones, as Washington calls on governments around the world to stop using its gear, particularly in the next generation of telecommunication networks, known as 5G.

Spavor, a business consultant with deep ties to Pyongyang, had been trying to drum up international interest in investing in North Korean economic projects. He and Kovrig, a former diplomat, were picked up in December, shortly after Canada arrested Huawei Chief Financial Officer Meng Wanzhou, who faces extradition to the United States.

The Communist Party's Central Political and Legal Affairs Commission said Kovrig had often entered China using an ordinary passport and business visas, "stealing and spying on sensitive Chinese information and intelligence via a contact in China."

"We are obviously very concerned with this position that China has taken," Canadian Prime Minister Justin Trudeau said about the accusations on Monday. "We’ve been engaging and standing up for the two Canadians who have been arbitrarily detained by China from the very beginning."

Lawyers for Meng are suing the Canadian government, its border agency and federal police, alleging their client was detained, searched and interrogated for three hours in violation of her constitutional rights.

Canada arrested Meng in Vancouver on Dec. 1 at the request of the United States, which has charged her with bank and wire fraud to violate American sanctions against Iran by doing business through a subsidiary it tried to hide.

HUAWEI TO SUE

In another escalation of the trans-Pacific dispute, Huawei plans to announce a lawsuit against the US government on Thursday on grounds related to a defense bill, a source with knowledge of the matter told Reuters.

Huawei will challenge an addition to the US National Defense Authorization Act (NDAA) signed last year, which controlled US government contracts with Chinese companies and strengthened the role of the panel that reviews foreign investment proposals. Beijing has condemned the NDAA act as targeting China.

Trump last year signed the law that limits Huawei and ZTE Corp's access to U.S. government and military contracts. That is part of an all-out US effort to close the two companies' access to not only the US market but major telecoms markets around the world where 5G networks are being designed and built.

US lawmakers introduced bills earlier this year that would ban the sale of US chips or other components to Chinese telecommunications companies that violate US sanctions or export control laws.

US officials have alleged Chinese telecom manufacturers are producing equipment that allows their government to spy on users abroad, including Western researchers working on leading-edge technologies. Beijing and the Chinese companies have repeatedly denied such allegations.

Trump is considering declaring a national emergency that would bar US companies from using telecommunications equipment made by Huawei and ZTE, three sources familiar with the situation told Reuters in December.

The Justice Department has also charged Huawei with stealing robotic technology from T-Mobile US Inc.

Trump said in February he may or may not include Huawei and ZTE in the trade deal being negotiated with China. Trump told reporters at the White House that US officials were not talking about dropping charges against Huawei.

Also on Monday, US Secretary of State Mike Pompeo said he thought his country and China were "on the cusp" of a deal to end their trade war.

HUAWEI CFO IN LIMBO

Meng, who is out on bail, is due to appear in a Vancouver court on Wednesday, when a date will be set for her extradition hearing. Ottawa rejects Chinese calls to release Meng, saying it cannot interfere with the judiciary.

The Canadian government approved her extradition proceedings on Friday. China, whose relations with Canada have deteriorated badly over the affair, denounced the decision and repeated previous demands for Meng's release.

It could be years before Meng, the daughter of Huawei's founder, is sent to the United States since Canada's slow-moving justice system allows many decisions to be appealed.

A final decision will likely come down to the federal justice minister, who will face the choice of angering the United States by rejecting the extradition bid, or China by accepting it.

source: news.abs-cbn.com