Russia rolls out the red carpet for Huawei over 5G

People queue outside a newly opened Huawei flagship store in Shenzhen in China’s southern Guangdong province. (AFP)
Updated 30 September 2019

Russia rolls out the red carpet for Huawei over 5G

  • The smartphone company plans to lead in the development of 6G in future, says top official

MOSCOW: While the US banned Huawei for alleged espionage and asked its allies to do the same, Moscow has rolled out the red carpet for the Chinese tech company, letting it develop 5G networks in Russia.

Analysts say the move is as much a show of solidarity with Beijing against the US as it is a drive to bring ultra high-speed internet to Russian tech users.

This month, Huawei opened its first 5G test zone in Moscow in partnership Russian operator MTS, with a view to rolling out the service to the rest of the capital.

Moscow authorities say the network will become part of the city’s normal infrastructure within the next few years.

A pioneer in telecoms networks compared to many Western countries, Russia plans to deploy 5G in all of its main cities by 2024.

When Chinese President Xi Jinping visited Russia in June — at the height of Washington’s conflict with Huawei — Russia’s main operator MTS signed a contract with the Chinese company.

At the inauguration of the 5G zone in Moscow, the CEO of Russia’s branch of Huawei Zhao Lei praised the company’s activities in the country.

“We have been working in Russia for 22 years. Thanks to our partners, we live well here,” he said. He added that Huawei, considered a world leader in 5G technology, plans to “lead in the development of 6G” in the future.

Huawei is also the world’s second-largest smartphone company. It did not respond to AFP’s interview requests. A source in Russia’s 5G research community said Huawei is the biggest investor in the development of mobile technologies in Russia, with “the largest research laboratory of all operators” in Moscow.

According to the Vedomosti business daily, Huawei currently employs 400 people in Moscow and 150 in Saint Petersburg in mobile research and development. It aims to employ 500 more people by the end of 2019 and 1,000 more over five years.

Experts said Russia’s welcome of Huawei does not mean the Chinese company is alone in the race for developing 5G in Russia.

“Russian operators are all collaborating with multiple 5G equipment vendors, Huawei included. We do not see any clear 5G leaders in the network deployment in Russia,” said Michela Landoni, an analyst at Fitch Solutions. She said operators prefer this approach to avoid being “reliant on one specific vendor” and to protect themselves against cyber threats.

The Tele2 operator was the first to launch 5G in Russia with Sweden’s Ericsson in August, on Moscow’s main Tverskaya street.

In the midst of a trade war and technological rivalry with China, the US has threatened to cut Huawei’s access to the US components and services it needs, such as the Android operating system that the company uses on its phones.

Russia then promptly stepped in to offer its Aurora operating system to the Chinese group.

If Android remains Huawei’s preferred choice, Landoni said Aurora could be a “short-term solution” for the group.

According to the analyst, Aurora could become a “stepping stone” in the development for Huawei’s own OS.


Make or break days for global oil ahead of OPEC crunch meeting

Updated 08 April 2020

Make or break days for global oil ahead of OPEC crunch meeting

  • OPEC, led by Saudi Arabia, were on Thursday scheduled to take part in virtual discussions with non-OPEC members, led by Russia, about a possible deal to revive the OPEC+ alliance
  • On Friday, energy ministers from the G20 nations, under the presidency of Saudi Arabia, will convene in another digital forum that will bring in the third part of the global oil equation – the US

DUBAI: The global energy world, in the midst of crisis as demand slumps to unprecedented levels due to the coronavirus disease (COVID-19) pandemic, faces two days that could make – or break – the oil industry for months to come.
Leading producers from the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, were on Thursday scheduled to take part in virtual discussions with non-OPEC members, led by Russia, about a possible deal to revive the OPEC+ alliance that fell apart in Vienna at the beginning of last month.
Then, on Friday, energy ministers from the G20 nations, under the presidency of Saudi Arabia, will convene in another digital forum that will bring in the third important part of the global oil equation – the US, currently the biggest oil producer in the world.
If no deal is reached from the two days of oil summits, the immediate prospect looms of a further fall in crude prices and, with global storage facilities already filling rapidly, the possibility of major exporters “shutting in” oil fields, jeopardizing future production.
Energy experts say the purpose of the meetings is two-fold: To reach agreement on how to limit the vast quantities of oil that are still being produced even as demand collapses; and to present some kind of united front in geopolitical terms in the face of the biggest economic recession since the 1930s.
The most visible immediate sign of any success from the meetings will be an increase in the price of crude oil on global markets. Brent crude, the Middle East benchmark, has lost nearly half its value in the past month.
The first aim – to try to balance oil supply and demand – is the more difficult. Global demand has fallen by at least 20 per cent from the usual daily consumption of around 100 million barrels, oil economists have calculated.
But, following the collapse of the OPEC+ deal that was putting a lid on supply, all producers have been pumping more crude. Saudi Arabia is producing more than 12 million barrels per day (bpd), a bigger volume than at any time in its history. All OPEC members, as well as Russia, have said they will increase output.
In this stand-off, US President Donald Trump intervened last week to say that he had spoken to Saudi and Russian leaders and that he “expected” a cut of 10 million, possibly even 15 million, bpd.
That looks like wishful thinking. For one thing, it would not rebalance markets. Anas Al-Hajji, managing partner of US-based Energy Outlook Advisers, said: “The amount of the cut is relatively small given the major drop in demand.”
There are also some difficult relationships to smooth over in the OPEC+ alliance. Saudi Arabia and Russia exchanged angry statements last weekend, each accusing the other of starting the oil price war. Iran, with big reserves but hampered by US sanctions from exporting in large quantities, said that it might not take part in the conference.
The choreography of the two meetings also presents hurdles. The US will not be present at the OPEC+ meeting, but American Secretary of Energy Dan Brouillette said he would take part in the G20 event.
Because it is a free-market industry, America cannot order its oil producers to reduce output, but most analysts are agreed any attempt to rebalance global supply would be impossible without a US contribution.
By going first, Saudi Arabia and Russia are “playing blind” without knowing what the Americans are thinking. Neither would want to agree big price-restoring cuts only for US producers – under big financial pressure at current levels – to swoop back into the market.
This week there have been some signs that the Americans are considering their own versions of cutbacks. The biggest US company, Exxon Mobil, said it would reduce capital expenditure on future projects by 30 percent; the US Energy Information Administration said oil production would fall by nearly 1 million bpd this year, in response to falling demand and financial pressures.
But even if the Saudis and Russians cut substantially alongside other big OPEC producers such as the UAE, and the Americans enter a long-term pattern of falling demand, it is still hard to see how cuts could reach the 10 million barrels Trump “expects,” let alone 15 million.
J. P. Morgan, the big US investment bank, said that it expects OPEC+ to come up with combined cuts of about 4.3 million barrels, most of that coming from Saudi Arabia, Russia and the UAE. “If it’s 4.3 million it only puts off the day when global storage gets filled completely,” said Robin Mills, CEO of Qamar Energy consultancy.
Storage facilities are nearly at the brim. Malek Azizeh, director of the premium facilities at the Fujairah Oil Terminal in the UAE, joked that he was going to hang a sign on the terminal gates: “Thanks, but no tanks.”