Canadian telecommunications companies are staying the course with Huawei, despite the arrest of the company’s CFO, Meng Wanzhou, in Vancouver and mounting international pressure on Canada to distance itself from the Chinese company.
U.S. officials are ramping up the pressure on Canada to follow their lead—and the U.K., Australia, Japan and New Zealand’s—in limiting the Chinese telecom’s access in Canada.
Rogers, SaskTel, and Ice Wireless said the week’s events—which included the U.K. telecom BT announcing it will block it from accessing its 5G network—have not affected their relationships with the Chinese smartphone and wireless infrastructure company.
Huawei currently works with a number of Canadian telecoms, including the Big Three. The company did not respond to a request for comment.
The company has also received funding and incentives from governments across Canada, including from Ontario, which promised the company a grant of up to $16 million in 2016 to build out 5G in the province. Huawei receives a 15 per cent tax credit for R&D expenditures from the federal government and provincial tax credits from Ontario, B.C. and Quebec.
Rogers Communications has “a national infrastructure agreement with Ericsson and are partnering with them to build our network,” said Michelle Kelly, director of media relations and network communications. She also wrote that there was “no update to share re: Hockey Night in Canada.” Huawei is the presenting sponsor of Hockey Night in Canada, which has an average nightly viewership of 2.36 million. The broadcast, hosted by Ron MacLean on Saturday nights, also airs on the CBC. The CBC declined to comment and redirected questions about the two-year sponsorship deal, signed in 2017, to Rogers.
Shaw Communications, which operates Freedom Mobile, is partnering with Nokia on 5G, according to Chethan Lakshman, Shaw’s vice-president of external affairs. He did not respond to the question of whether Shaw is currently using Huawei equipment
Telus, BCE and Vidéotron did not respond to requests for comment. In 2017, Telus carried out 5G trials in partnership with Huawei, and Bell Canada worked with Huawei on a smart-tech project with an Ontario winery.
Michelle Englot, director of external communications at SaskTel, said the company would not “comment on the recent events with Huawei as that matter is before the courts and is not a SaskTel matter.” However, she confirmed that SaskTel has used Huawei equipment for “the radio access network components in its 4G/LTE wireless network,” adding that other national carriers have done so, as well, and that the equipment “comprises only a portion” of its network. “SaskTel takes network security very seriously,” she wrote, “and is confident that it manages security appropriately through internal use of security best practices and externally with all its network suppliers, which includes Huawei and its other global suppliers.”
Huawei’s Mate20 Pro and P20 smartphones are currently offered by Rogers, Bell, Telus, and SaskTel.
Canada’s carriers are not suspending their partnerships with Huawei, despite the arrest of the company’s CFO in Vancouver and countries including the U.S., the U.K., Australia, New Zealand and Japan distancing themselves from the company. The Chinese company’s brand and logo will continue to be associated with Hockey Night in Canada.
In 2012, Huawei agreed to a multi-year contract with Ice Wireless—which operates in the Yukon, the Northwest Territories, and Nunavut—to provide equipment for its 3G and wireless broadband network. “We have seen no reason—based on our internal security audits—to believe the media reports out there about Huawei,” wrote Samer Bishay, CEO of Ice Wireless, in an email. “We remain vigilant in ensuring the utmost security on our networks.”
Not all telecoms feel the same. Earlier this week, the United Kingdom’s BT said it was removing Huawei equipment from parts of its existing 3G and 4G networks, and will not use the company’s equipment for its 5G network. BT said the changes had been underway since 2016, when it acquired wireless provider EE, which had used the Chinese company’s technology. On Friday, Huawei promised to spend US$2 billion to address British security services’ concerns.
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Earlier Friday, Meng was accused of violating U.S. sanctions on Iran. U.S. officials are asking Canada to extradite Meng to face the charges, while Chinese officials have requested her immediate release. Both Prime Minister Justin Trudeau and Foreign Affairs Minister Chrystia Freeland said they hadn’t yet spoken with Chinese officials about Meng’s arrest. U.S. officials are ramping up the pressure on Canada to follow their lead—and the U.K., Australia, Japan and New Zealand’s—in limiting the Chinese telecom’s access in Canada.
Huawei is also a member of the Centre for Excellence in Next Generation Networks (CENGN), an Ottawa-based technology development organization that partners with the federal and Ontario governments’ research commercialization programs. “CENGN will continue to monitor the situation with Huawei,” said Rick Penwarden, CENGN’s marketing manager.
Huawei Canada has been in operation since 2008 and, according to the company, employs over 700 Canadians.
Edgar Baum, CEO of Strata Insights, a Toronto-based “brand economics” consultancy, said the story has quickly shifted from Meng’s arrest to broader concerns about Huawei, including the Chinese government’s support for the company. There’s an “impression that they are in the same camp as companies that have been found guilty of being involved in nefarious transactions,” he said, but noted that “in the absence of evidence, we just have a lot of suspicion.”
Recent events involving Huawei have played out in the arena of geopolitics, not consumer affairs, according to Baum. That puts the company in a tricky position, because if it tries to explain itself to consumers, it risks alerting them to issues of which they may not already have been aware, he said.
Thomas Pigeon, CEO of Pigeon Brands, said the impact has been more immediate. “Most people will be looking at Huawei very differently today than we did last week,” he said. To recover from a scandal or serious failure, brands need to have built up trust with the public over a long period of time. But in Huawei’s case, Pigeon said, “This is a serious mid-ship blow to a new brand that will be challenging to recover from.”
Brands associated with Huawei are also at risk, both branding experts said. Baum said Rogers is “probably the most affected corporation in Canada” because of the Hockey Night in Canada sponsorship, rather than the size of the two firms’ financial relationship. Rogers can’t really end that partnership without also stopping selling Huawei smartphones, according to Baum, which he said would amount to telling customers: “On the back of suspicion, we’re going to go and remove consumer choice.”