U.S. officials have told telecommunications executives around the world to steer clear of Huawei Technologies Co., calling the company a national-security threat, but that hasn’t prevented AT&T Inc. T 0.72%from using the Chinese company’s equipment in Mexico.
While AT&T has kept Chinese equipment out of its domestic networks, industry executives say the U.S. company uses Huawei’s gear to run a large part of the wireless network in Mexico, where the electronics giant is as welcome as any other supplier.
Huawei boxes sit atop cellphone towers across Mexico, where AT&T is the No. 3 provider in terms of wireless subscribers. The Dallas company inherited much of its Mexican gear through acquisitions, though executives say it also has used the Chinese supplier to upgrade its 4G network in recent years.
“We are the most significant vendor in this country,” Cesar Funes, a Huawei vice president in Mexico, said in an interview. “We respect, of course, headquarters’ discussions with their governments. We just continue supplying them what we are asked to supply.”
“When we upgraded our Mexico network to 4G LTE, we replaced Huawei in our data core network with equipment from the same suppliers we use in the United States, because it gave us consistency in design and scale in purchasing,” the spokesman said. “We expect to harmonize our networks in the same way when we upgrade to 5G in Mexico.”
Huawei competes with Sweden’s Ericsson AB and Nokia Corp. of Finland to equip cellphone network operators. Most large telecom companies keep two or more suppliers in the mix to maintain leverage in future negotiations.
.. Huawei is the world’s top telecom supplier, according to market analyst Dell’Oro Group. Its success abroad has alarmed American officials who fear that telecom executives won’t be able to avoid using Chinese producers, especially in countries with close economic ties to the U.S.
Today’s 4G networks are linked across borders, but future 5G networks could make national boundaries even less relevant. Mr. Strayer said newer cell-tower equipment will be more than “dumb” conduits for information, leaving a broader swath of cellphone networks vulnerable to potential snooping.
AT&T entered Mexico in late 2014 after the Mexican government enacted legislation to enhance competition in a famously concentrated telecom market. The Dallas company pieced together a wireless company by snapping up two smaller players, Iusacell and Nextel Mexico, inheriting a dense network of machinery bought from Huawei, among other suppliers.
.. AT&T doubled down on Huawei over the next four years as it upgraded the infrastructure it acquired to support 4G service. A senior AT&T executive in 2016 told an industry publication that the supplier’s performance was “excellent.” The company has estimated the price of replacing the Huawei electronics it has in Mexico and found the cost prohibitive, according to a person familiar with the matter... The Chinese company, which also makes cellphones, has spent years raising its profile in Mexico. It had its brand name splashed across jerseys for the popular soccer team Club América—until the AT&T logo took its place. When AT&T’s Mexican headquarters moved into a glassy tower finished in 2016, Huawei moved into a satellite office a floor away to stay close to its client... AT&T has bet that a Mexican middle class can boost its future profits. The company invested more than $7 billion, including the $4.4 billion spent to acquire Nextel and Iusacell, over the past four years to improve its network there.
In the coming months, you will be able to buy your first smartphone compatible with faster 5G networks. It will likely come loaded with features like a large screen and souped-up camera.
But you’re probably going to have to spend north of $1,000 for it—and there is no guarantee it is going to instantly change your mobile experience.
There are a couple of reasons why you likely won’t get those blazing-fast speeds that 5G promises soon. For one thing, coverage is going to be limited.
The four largest U.S. wireless carriers— AT&T Inc., T +0.23% Verizon Communications VZ +0.97% Inc., T-Mobile US Inc. TMUS +0.53% andSprint Corp. S +0.63% —have all announced plans to roll out 5G this year. But their plans include very few parts of the country—only some large cities like
- Los Angeles,
- Chicago and
A full nationwide buildout will take years.
“Even if you have a 5G phone this year, your chance of actually accessing a 5G network is probably fairly low,” says Mark Hung, an analyst at research firm Gartner Inc.
To understand why, consider that there are two ways to provide 5G coverage—and the phone you choose may not be designed to handle both.
One method delivers 5G signals on the high-frequency end of the spectrum. The upside is extremely high speeds—fast enough, it is often said, to download whole seasons of a TV show in minutes. The downside is that these signals don’t go through walls or other obstructions very well. The other method of delivering coverage—using the lower end of the spectrum—means that signals travel better, but speeds aren’t as fast.
By far the largest distraction was net neutrality, an academic networking issue with a negligible effect on consumers. Net neutrality remained obscure to the public until 2014, when a coalition of law academics, media activists and large and small Web companies persuaded President Obama to their side. Net neutrality then became a political issue, which poisoned the normally chummy relationships between the FCC and the relevant congressional committees and turned telecom and tech companies against each other. The regulatory warfare has played out in seemingly endless agency proceedings, congressional hearings and court petitions.
In his first week he withdrew from the unratified 12-nation Trans-Pacific Partnership. He prepared to pull out of the U.S.-Korea Free Trade Agreement (Korus) and the North American Free Trade Agreement. Earlier this year he imposed steep tariffs on imports of steel and aluminum, using a little-used national security law, and threatened the same for autos.
Today, Korus and Nafta have been replaced by updated agreements(one not yet ratified) that look much like the originals. South Korea accepted quotas on steel. Mexico and Canada agreed to higher wages, North American content requirements and quotas for autos.
These represent a step back from free trade toward managed trade, but they will have little practical effect: The limits on how many cars Mexico and Canada can ship duty-free to the U.S., for example, exceed current shipments. Mr. Trump hasn’t stopped threatening auto tariffs, but for now his officials have elected instead to seek broader tariff reductions with Japan and the European Union.
.. Meanwhile, the U.S. trade deficit that incenses Mr. Trump has grown during his presidency, especially with China and Mexico, as a strong American economy sucks in imports. His exhortations to manufacturers to bring jobs back to the U.S. have largely fallen on deaf ears.