SE Asia fragments on pro and anti-Huawei lines

In the ongoing US-China global “tech war”, Washington scored another win when Malaysia recently snubbed China’s Huawei in favor of Sweden’s Ericsson to develop its 5G network infrastructure.

The US-favored Swedish telecom firm will be responsible for developing an end-to-end network across Malaysia in conjunction with the state-owned Digital Nasional Berhad (DNB).

In the US$2.65 billion megadeal, Ericsson will provide core technology and operational systems as well as support for local vendor development and expansion in the Southeast Asian nation known for balancing its US and China relations.

“Ericsson has undertaken to arrange financing for the supply, delivery and management of the entire 5G network,” DNB said in a statement on the deal. Kuala Lumpur and Putrajaya are both set to launch fully their 5G networks before the end of this year.

The decision came as a surprise to many political and industrial observers who earlier saw China’s Huawei as the frontrunner to win the prized infrastructure project.

Huawei, which had already signed a 5G deal with Malaysia’s second-largest mobile network Maxis, was even favored by former Malaysian prime minister Mahathir Mohamad, who openly accused China of “new colonialism” through ‘debt trap’ diplomacy.

“I am quite sure for a long time, the [US] CIA have been reporting on everything that is done in Malaysia and China. We did not carry out a boycott of America because of that,” said Mahathir during a visit to Japan at which he addressed concerns over potential spying over China’s 5G technology. 

Mahathir praised China for having “the best [telecom] technology in the world”, and wryly joked “[they] can spy as much as they like because we have no secrets.”

China is pushing hard to build neighboring Southeast Asia’s 5G network infrastructure. Indonesia and the Philippines, the region’s two most populated nations, are relying on Chinese telecom companies to help develop their 5G networks.

Huawei is also bidding to build Thailand’s 5G infrastructure. The Chinese telecom giant, which maintains thousands of staff in the kingdom, invested 475 million baht last year to establish a “5G ecosystem” innovation center in partnership with the Digital Economy and Society Ministry.