Connect (X)

Tag Archives: Huawei

What Happened in 2021, and What’s Going to Happen in 2022

Contributed article by John Strand, Strand Consulting

2021 started with the Consumer Technology Association (CTA) turning its physical event, the Consumer Electronics Show (CES) in Las Vegas, into a digital event.  In February, GSMA made its Barcelona Mobile World Congress (MWC) into a combination digital and physical event. Usually, MWC attracts about 100,000 guests. In 2021, there were about 20,000 participants, of which only 5,000 came from outside of Spain.

GSMA expects to implement MWC 2022. The question is whether the physical part will be much bigger than it was in 2021. Although there are fewer hospitalizations with this wave of COVID-19 variant, more people become sick and need to stay in bed for at least a week. This variant is more likely to affect business negatively, particularly labor-heavy companies. This in turn is quite likely to affect the physical portion of MWC negatively, because unnerved potential convention-goers probably will remain at home.

2022 will continue to showcase that the mobile telecommunications industry plays a critical role in enabling modern society to function. Telecom companies should receive more goodwill and should become better at exploiting it.

Strand Consult’s study of the broadband middle mile showed that rural broadband providers face many challenges in their effort to deliver broadband to disparate customers over large geographic areas. The study creates transparency for policymakers about the cost, level and source of internet traffic. It demonstrates that five so-called Big Streamers account for a disproportionate share of downstream traffic. For every $1 of revenue earned from the five Big Streamers (Netflix, YouTube, Amazon, Disney+ and Microsoft), rural broadband providers incurred 48 cents in middle mile costs (equipment, electricity and labor), which they could not recover from the Big Streamers, end-users or government reimbursement programs.

The Big Streamers have tremendous global market power and ignore broadband providers’ requests to negotiate on cost recovery. Moreover, the free caching solutions proffered by the Big Streamers add costs to networks and only serve proprietary content. Strand Consult observes that there is a pervasive problem of unrecovered cost at the local, national and international levels that threatens sustainability and undermines policy to close the digital divide. In 2022, this problem will have an effect on the forward motion of the broadband segment.

Many Talk About OpenRAN, but Mobile Operators Still Buy Classic RAN

In our opinion, O-RAN is one of the most overhyped technical solutions since the launch of 3G wireless communications in the year 2000. Although the use of O-RAN promises to cut RAN capital expense (capex) by as much as half, it does not rise to the level of hyperbole that 3G would turn radio spectrum into gold. But eventually, it comes close.

In August 2021, Nokia paused its work in the group for fear of violating U.S. restrictions on the many Chinese members. Strand Consult has yet to find an O-RAN proponent who can explain how the prevalence of 44 Chinese companies in the O-RAN Alliance does not compromise O-RAN.

O-RAN is being promoted by industry and governments from the United States, Japan, Germany, the United Kingdom and even Russia as trade policy and enterprise enhancements, though the O-RAN market itself appears to be growing minimally. The U.S. executive branch stopped referring to the O-Ran Alliance in its policy communications and now uses the O-RAN Policy Coalition as if it’s a technical standards development organization. Yet the O-RAN website clearly shows that it’s an advocacy organization whose purpose is to influence governments on behalf of its member companies.

It is important to understand that O-RAN is built on top of 3GPP 4G and 5G technologies. It is not a solution that can replace existing networks on a 1:1 basis. Nor do O-RAN technologies support 2G and 3G, which most of the world still uses for machine-to-machine (M2M) communications and telephony. If a legacy operator wants O-RAN, it probably would have to maintain two sets of parallel base stations, one set for 2G and 3G and the other 4G and 5G. Running two parallel networks increases rental and energy costs, compared with running one network.

If O-RAN reaches the level of success its proponents predict, it will account for less than 1 percent of the 5G mobile sites in 2025 and not more than 3 percent in 2030. It looks as though O-RAN is too little, too late, to make a difference in a world in which operators are deploying 10,000 classic 5G sites every month.

At the end of the day, mobile operators’ job is to deliver a great network experience to their customers. O-RAN technologies offer only limited features compared to the 200 3GPP 5G networks launched globally by the end of 2021. In practical terms, one cannot compare the functionality of Rakuten´s in Japan 4G and 5G network with the functionality of an American 4G and 5G network.

The United States will evolve further as it upgrades from 3GPP Release 15 to Releases 16 and 17, and Rakuten probably will fall farther behind. The O-RAN claims are even further distorted when proponents say the O-RAN is a way for Europe to catch up with the United States, China and Korea in 5G technology. Note that the United States and South Korea achieved 5G leadership without the use of Huawei and ZTE equipment or the use of O-RAN.

2022 will see continued O-RAN advocacy, although it will be more difficult for its proponents to evade the tough questions about the hard reality.

China and Huawei Probably Will Have Another Difficult Year

When Joe Biden became president in January 2020, many wondered how U.S. policy would change, concerning China and Huawei. Strand Consult maintained that the policy was bipartisan and was unlikely to change, and, if anything, it might be toughened, particularly as reforms adopted in 2018 gave the new administration additional tools to prosecute human rights violations.

Huawei still faces significant financial pressure, and public opinion about Huawei has not changed. Many countries see it as unsafe and unsustainable to use Huawei equipment in telecommunications networks. Many operators have experienced increased reputational and regulatory risk by using Huawei, and corporate customers do not want their sensitive and valuable data to be vulnerable to the Chinese government.

In any event, the good news is that it need not be expensive to rip and replace Chinese equipment. As operators evolve to 5G, they have planned for upgrade costs already, and fortunately, there are many competitively priced alternatives to Huawei.

Huawei has pivoted to the cloud market and attempts to bill itself as a trustworthy IT supplier for the public and private sectors and as an alternative to the large IT software companies that supply a combination of services and a cloud. Huawei probably will succeed with its strategy in China and in some countries sympathetic to the Chinese regime. However, it will be a hard sell for Huawei to convince public sector buyers in the United States and Europe to buy its solution of putting data into Chinese IT systems and the Chinese cloud.

Cybersecurity Is Getting Even Bigger

In 2021, it was telling how gatherings from leaders from across and political spectrum, from developed and emerging countries alike, view cybersecurity. All nations are concerned about addressing serious global problems like illicit finance, human trafficking and ransomware driven by rogue nations and crime cartels. This concern means that secure networks and the practices to defend them will become even more important in 2022.

Both the United States and the European Union have rolled out new policies and regulations to improve network security, including 5G. This includes the European Union’s Toolbox and the U.S. Secure Equipment Act, which FCC to deny equipment authorizations to firms posing an unacceptable national security list. These companies include Huawei, ZTE, Hytera, Hangzhou, Hikvision and Dahua. Drone maker DJI is most likely be added, and many national security experts say restrictions should be increased for Lenovo, TikTok and chipmaker YMTC.

Strand Consult believes the push for greater security is incompatible with O-RAN technologies, which are increasingly influenced by Chinese players.

Amazon, Google, Facebook, Microsoft – Big Tech Mutates Faster Than Corona

There is good news and bad news about big tech. Just when health authorities believe they have the virus under control, a new variant emerges. Similarly, governments are trying to regulate big tech. Yet, just when it seems that big tech could be pinned down, big tech adapts to the new reality – with a new name, a new practice or a new public-private partnership.

The conversation about big tech and its role in society will continue in 2022. Policymakers must realize that big tech is adapting faster than the efforts to regulate it.  If anything, the regulations adopted to date, such as the General Data Protection Regulation (GDPR), have made big tech even stronger. Today, these companies’ revenue, market share and earnings have increased, compared with the time before regulation. Additionally, the government has made it harder for small and medium sized companies to compete.

The bottom line is that efforts to regulate big tech have failed.  Governments should instead make big tech pay for its use of resources. Current policy allows big tech a free ride on telecom networks and the public’s airwaves. These giveaways only increase big tech companies’ market share and profitability.

These are important lessons as policymakers look at the cloud market.

The Cloud Explodes in 2022

Policymakers will turn their attention to public clouds, which hold an increasing amount of citizen and enterprise data. Big tech probably has more knowledge and data about people and firms than the government itself. In 2022, cloud services from Amazon, Microsoft and Google will emerge in the public consciousness. It is hard to see how a Chinese alternative could gain traction in this market, but it still raises questions about existing cloud practices.

Mobile operators put parts of their networks in Amazon, Microsoft and Google clouds. As mobile networks are increasingly integrated with clouds, this means that individuals and firms are even more embedded with big tech. There is no turning off big tech and no choosing not to use it.

This situation adds to the complexity and difficulty of data portability from one cloud to another. In practice, companies may find it impossible to migrate from one cloud to another.  Although this sets off alarms in the antitrust world, it does not diminish the technical reality that cloud services from Amazon, Microsoft and Google are not comparable 1:1. In practice, Amazon, Microsoft and Google will not achieve the same result if you use the three platforms’ AI solutions to analyze your data.  One big question in 2022 is which has the most intelligent AI solution: Amazon, Microsoft, or Google?

One thing is for sure: It is far easier to switch the vendor of 5G infrastructure equipment than to switch cloud providers.

The Markets for Mobile Phones and Services Are Boring

Strand Consult has chronicled the development of the mobile phone market and has published popular reports on the iPhone. It has grown banal to watch Apple launch subsequent new versions of the iPhone that look nearly identical to the one before. With few technical improvements in each subsequent phone, the main difference is the model number. In 2021, Apple released iPhone 13, and in 2022, there most likely will be an iPhone 14, and so on. It is a testament to the company’s marketing that it has been able to navigate inevitable device fatigue.

Mobile apps also lumber on with subsequent versions. The key development in 2021 has been the use of mobile apps to manage COVID-19, and that trend will continue in 2022. Additionally, governments have entered the mobile app market in a big way with vaccine passports, which for many countries have become or will become de rigueur.

Tower Companies Spread in the Value Chain

Tower companies are an important part of the efforts to find profitability in an increasingly difficult telecom market. Many mobile carriers have discovered that they can sell their towers and post unrealized assets. In Europe alone, selling towers has contributed some 36 billion Euros to the mobile industry.

Around the world, we see tower companies starting to spread in the value chain. In Brazil, they invest in fiber, while others consider whether to enter the spectrum market. In 2022, we will see much more of this activity.

A study case is Denmark’s TDC. Three Danish pension funds, PFA, PKA, ATP and Macquarie Infrastructure and Real Assets have chosen to split the telecom operator into an infrastructure company and a service company. The two new entities will be TDC Net for infrastructure and Nuuday for service. We believe it to simply be financial acrobatics. The trend of the breakup of telecommunications companies into infrastructure and service entities will be seen increasingly in 2022.

The Market for Private 5G Networks Is Hot and Crowded

In 2021, much was written about private 5G networks, such as, who will build them, and who will run them. It’s a market in which many want to enter, everyone from mobile operators to IT companies to systems integrators to infrastructure suppliers. O-RAN players also want to enter, though it remains to be seen if they can deliver the heavy demands of a classic mobile network. Expect fierce competition, very low margins and an inevitable shakeout.

The C-band Cha-cha

The United States notched an unparalleled success with the C-band spectrum auction, a record for the U.S. spectrum at more than $90 billion. Mobile operators were set to launch 5G in this band on Dec. 5, 2021, but were hijacked by the Federal Aviation Administration (FAA), which posted a dubious advisory about 5G transmissions and altimeters.

U.S. planes fly to more than 50 countries where some 200 5G networks operate, and there have been no reports of interference between 5G transmissions and altimeters. The FAA, which has known of 5G for years, has done nothing to modernize altimeters. The question is which aviation lobby the FAA is protecting, which most likely is small aircraft operators and possibly helicopter operators that don’t want to upgrade their safety equipment.

Commercial aircraft makers such as Boeing produce planes with three modern altimeters each. Their requested mitigation was a guard band of 110 MHz; the FCC doubled it. U.S. operators also volunteered to reduce power levels around U.S. airports for six months to prove compatibility and will roll out 5G in the band on Jan. 5.  Thus, the United States has the most generous, though excessive, protections for altimeters in the world.

All in all, we’re going to see that the big markets are going to set agendas for other markets. Much of what is needed requires political goodwill in a world in which the political system rarely understands the importance of what is happening.

2022 Will Show Rising Prices in the Wireless Space

After mobile and broadband prices have fallen over time, 2022 should be the year when prices rise around the world. Look no farther than little Denmark, which, in 2021, found the telecom regulator colluding with energy companies to price-fix the wholesale price of fiber access at a level above what the market offers. As such, prices are guaranteed to rise in Denmark because of regulators’ efforts. Given that the regulated price of fiber will increase, broadband prices on private networks will follow.

We also expect that many of the operators that have difficulty creating value for their shareholders through organic growth will raise prices in 2022. It follows that a highly valuable service such as broadband telecommunications should increase in price. This is the law of demand, and without price increases, it will be difficult to invest in network upgrades.


John Strand is CEO of Strand Consulting.


Carr Praises House Passage of Scalise-Eshoo Led Secure Equipment Act

From left: FCC Commissioner Brendan Carr, Republican Whip Steve Scalise (R-La.) and Rep. Anna Eshoo (D-Calif.).

Today, FCC Commissioner Brendan Carr applauded the passage of the Secure Equipment Act by the U.S. House of Representatives.

“This bipartisan legislation introduced by House Republican Whip Steve Scalise (R-La.) and Congresswoman Anna Eshoo (D-Calif.) requires the FCC to update its equipment authorization process to end the review and approval of equipment and devices made by companies deemed an unacceptable risk to our national security,” a statement from Carr’s office reads.

According to Carr, he first called for the FCC to take this action in March, and the Commission started considering the idea in June by adopting a Notice of Proposed Rulemaking. Similar legislation has been introduced in the U.S. Senate by Sens. Marco Rubio (R-Fla.) and Ed Markey (D-Mass.).

“I commend Republican Whip Steve Scalise and Congresswoman Anna Eshoo for their leadership in securing America’s communications infrastructure,” Carr said. “Their bipartisan Secure Equipment Act would close a glaring loophole that Huawei and others are exploiting today to place their insecure gear into our networks. I applaud their work to eliminate the threats posed by this equipment, and I am pleased to see such strong bipartisan support for this legislation through today’s vote. Now that this important legislation has passed the House, I urge swift consideration in the U.S. Senate.”

IDTechEx Discusses Whether Huawei Will Survive

Contributed Article from IDTechEx

Under U.S. sanctions, Huawei’s revenue in the first half of 2021 was $50.1 billion, which despite COVID-19 is a 38 percent decrease from $71 billion in the same period last year; Xu Zhijun, Huawei’s rotating chairman, pointed out that Huawei’s goal is to survive.

IDTechEx has launched a new version of its market research report on 5G wireless communications, “5G Technology, Market and Forecasts 2022–2032.” Some of the findings from the new report are presented in this article.

The smartphone business was once one of Huawei’s largest sources of revenue. However, under the influence of the U.S. ban, Huawei’s smartphone revenue has fallen sharply. Huawei said that in the first half of 2021, the total revenue of consumer products including smartphones was 47 percent lower than that of 2020. Huawei was forced to shift its strategic focus away from its once most profitable sector.

Huawei first stocked up on nearly a year’s worth of chipsets and electronic components to mitigate the effect of the U.S. sanctions on its 5G supply chain, which catalyzed the global semiconductor shortage. Afterwards, Huawei sold its smartphone subsidiary “Honor” to Shenzhen Zhixin New Information Technology Company in 2020, so that Honor could get chipset supply from U.S. vendors such as Qualcomm and survive. So far, Huawei’s smartphones introduced this year have all been 4G-only, indicating that the company has officially run out of the 5G chipsets it had stocked up before and is struggling to find another. Rumors are saying that Huawei may sell the rest of its smartphone business this year; however, Huawei has denied this. Nonetheless, it is no doubt that Huawei’s smartphone business is unlikely to return to its former glory anytime soon.

5G mid-band micro base stations market by region (2020). Source: IDTechEx – “5G Technology, Market and Forecasts 2022-2032.”


Because of the huge 5G expansion in the Chinese market, Huawei’s infrastructure sector appears to be more solid. China accounts for over 60 percent of the total 5G infrastructure industry, according to IDTechEx’s market research report “5G Technology, Market and Forecasts 2022–2032”. Huawei is China’s leading 5G system vendor. According to the results of 2021 5G infrastructure bidding auctions published by China Mobile and China Telecom, Huawei secures around 60 percent of the share. Looking ahead, the 5G infrastructure market will continue to grow in China. It is also important to recognize the Chinese government’s effect on emerging countries such as Africa and Southeast Asia. Although 5G growth in those emerging countries is slower than in developed nations, it will happen, and Huawei will play a key part in that because Huawei is able to deliver 5G systems at the lowest market price, as well as thanks to the Chinese government’s efforts.

After the breakdown of its smartphone business, Huawei began to significantly invest in two important areas: digital transformation and the automotive sector. The growing need for digital transitions in China, along with the Chinese government’s strong push, will allow Huawei to expand in this area. This is proven by the fact that revenue in Huawei’s enterprise sector in the first half of 2021 is 18 percent higher than in the same period in 2020. Furthermore, Huawei is investing heavily in software development, which was previously not their primary emphasis. Technologies such as big data analysis and artificial intelligence that will define the future of telecommunications and associated applications are now a significant research priority for them. Autonomous vehicles will require 5G connection to reach their full potential, and China’s autonomous vehicle industry is massive. Huawei stated this year that it will invest $4.43 billion in autonomous driving and electric car technologies, and it has already begun to collaborate with local automakers on several projects.

So, will Huawei survive? They are suffering, but there is no indication of Huawei giving up. Given the enormous size of the Chinese domestic market, their role in the booming 5G infrastructure rollout, major technology investments in key future trends, and the Chinese government’s financial and political support, Huawei’s odds of changing the tide in the future are not bleak.

For further information on 5G including regional development, player analysis, market forecasts, application case studies, and technology benchmarking studies see “5G Technology, Market and Forecasts 2022–2032.” Sample pages are available for all IDTechEx reports; please contact [email protected] to find out more.

For the full portfolio of 5G-related research available from IDTechEx, please visit here.

Source: IDTechEx

Huawei’s David Wang Talks 10 Wireless Industry Trends in ‘Roads to Mobile 2030’

David Wang delivering a keynote speech at MBBF 2021.

(DUBAI, UAE – Oct. 13, 2021) — During the 12th Global Mobile Broadband Forum (MBBF), David Wang, Huawei’s  executive director of the board and chairman of ICT infrastructure managing board, delivered a keynote speech titled “Roads to Mobile 2030: 10 Wireless Industry Trends.” He said that Huawei has identified 10 wireless industry trends to define future-oriented wireless networks and prepare the industry for what he called the Intelligent World 2030.

As Wang explained, by 2030, the digital and physical worlds will become deeply integrated, creating a near-real-life experience. The digital economy will also become a primary driver of the real economy, he said, and industry will shift focus from device efficiency to decision-making efficiency. However, these advances also will rely on the achievement of intrinsic network security and the improvement of energy efficiency to protect the environment through green growth, he said.

Mobile networks will be an important part of Huawei’s Intelligent World 2030 concept, and so Wang summarized the mobile industry’s 10 trends for the next decade.

Trend 1: 10 Gbps for Physical-Digital Integration

In the future, digital communications will be used to expand and deepen exchanges of information between people, delivering multi-sensory experiences including hearing, sight, touch and smell. To enable these features, mobile networks will need to support 10 Gbps at millisecond latency everywhere and transmit information in ways that are more semantically organized.

David Wang

Trend 2: One Network for 100-Billion All-Scenario IoT Connections

Digital society will be reshaped by the 100 billion thing-to-thing connections cellular networks will have to support by 2030. Driven mainly by all-scenario IoT, networks will have to begin offering different types of connections services, differentiated by speed and priority requirements. This means a deterministic experience with lower latency and higher reliability must be delivered and a new form of wireless IoT that features ultra-low power consumption and passive connections must be created.

Trend 3: Satellite-Ground Collaboration for 3D Coverage

Satellite-ground collaboration will plug the gaps in wireless ground coverage and achieve three-dimensional airspace coverage, enabling communications and control for future drones and aircrafts. Mobile networks, with their exiting advanced communications technologies and multi-trillion dollar market, will also likely be used to nurture the new satellite communications technologies.

Trend 4: Integrated Sensing & Communications for True Digital Replicas

Sensing and communications will be further integrated, enabling real-time digital replication of the physical world and facilitating high-level autonomous driving and drone management. Both radio interfaces and network architectures will need to be similarly integrated and sensing resolution technology will need to advance to the centimeter level using ultra-wideband technology with massive MIMO antennas to achieve these functions.

Trend 5: Intelligence in Every Industry and Connection

Wireless networks will become fully integrated with AI technologies to enable level-5 fully autonomous driving networks, which will further support automated O&M, deliver premium experiences and minimize carbon footprints. Future radios will also be designed with native intelligence, and smart radio algorithms will further optimize the management of channel coding and radio resource.

Trend 6: Full-Link and Full-Lifecycle Green Networks

As network traffic grows 100 times over in the next few years, there will be an equal spike in demand for solutions that reduce network energy consumption. Per-bit energy efficiency will also need to improve at a similar rate. Energy efficiency must be considered in every aspect of network design, including radio interfaces, devices and sites. This will enable the construction of these full-link and full-lifecycle green and sustainable networks.

Trend 7: Flexible Full-Band Sub-100 GHz

By 2030, nations will need an average of 2 gigahertz of mid-band bandwidth and over 20 gigahertz of bandwidths on millimeter-wave to accommodate growing traffic. The industry will need to facilitate the evolution of sub-100 GHz spectrum to NR and redefine spectrum use using multiband integration and other innovative technologies to achieve 10-fold spectral efficiency improvement.

Trend 8: Generalized Multi-Antenna for Reduced Per-Bit Cost

Per-bit data transmission costs will be reduced as multi-antenna technologies begin to be applied to every spectrum band and every scenario. Ultra-wideband modular antennas will support flexible combinations of multiple bands, and intelligent reflecting surfaces will apply multi-antenna technologies in more scenarios to enable cloud-based, higher-performance deployment.

Trend 9: Security as the Cornerstone for a Digital Future

Intrinsic device security and intelligent and simplified security at the network layer will become increasingly important as network security and resilience come more into the global spotlight. Operators will need to provide these kinds of simplified security services via cloud-network synergy for their industry customers to promote digital transformation.

Trend 10: Mobile Computing Network for Device-Pipe-Cloud Collaboration

Future mobile networks will support more diverse services, such as the Metaverse, industrial field networks and vehicle-to-everything (V2X) communications. This means that computing will need to be integrated with mobile networks to provide uninterrupted, high-quality services on demand, because a single-service model will be insufficient for building new digital platforms.

Wang rounded out his presentation by reiterating how these 10 industry trends are a bright sign that the wireless industry is moving quickly in the direction of a fully intelligent world. He closed out promising Huawei woudl continue to work with industry partners to define these networks of the future and make their vision of the Intelligent World 2030 a reality.


Huawei CFO Meng Wanzhou Admits to Misleading Global Financial Institution

On Sept. 24, the U.S. Attorney’s Office for the Eastern District of New York released the following information:

Meng Wanzhou, 49, chief financial officer of Huawei Technologies, appeared before U.S. District Judge Ann M. Donnelly in federal district court in Brooklyn, New York, for an arraignment on charges of conspiracy to commit bank fraud, conspiracy to commit wire fraud, bank fraud, and wire fraud, after she entered into a deferred prosecution agreement (DPA) with the United States Attorney’s Office for the Eastern District of New York, the Counterintelligence and Export Control Section of the Justice Department’s National Security Division (CES) and the Money Laundering and Asset Recovery Section of the Justice Department’s Criminal Division (MLARS) to resolve those charges.

Nicole Boeckmann, acting U.S. attorney for the Eastern District of New York, Acting Assistant Attorney General Mark J. Lesko of the Justice Department’s National Security Division, Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division and Alan Kohler, assistant director of the Federal Bureau of Investigation, Counterintelligence Division (FBI), announced the deferred prosecution agreement.

“In entering into the deferred prosecution agreement, Meng has taken responsibility for her principal role in perpetrating a scheme to defraud a global financial institution,” stated Acting U.S. Attorney Boeckmann.  “Her admissions in the statement of facts confirm that, while acting as the chief financial officer for Huawei, Meng made multiple material misrepresentations to a senior executive of a financial institution regarding Huawei’s business operations in Iran in an effort to preserve Huawei’s banking relationship with the financial institution.  The truth about Huawei’s business in Iran, which Meng concealed, would have been important to the financial institution’s decision to continue its banking relationship with Huawei.  Meng’s admissions confirm the crux of the government’s allegations in the prosecution of this financial fraud—that Meng and her fellow Huawei employees engaged in a concerted effort to deceive global financial institutions, the U.S. government and the public about Huawei’s activities in Iran.”

“This deferred prosecution agreement will lead to the end of the ongoing extradition proceedings in Canada, which otherwise could have continued for many months, if not years,” stated Acting Assistant Attorney General Lesko for the Justice Department’s National Security Division. “We are enormously grateful to Canada’s Department of Justice for its dedicated work on this extradition and for its steadfast adherence to the rule of law.”

“Financial institutions are our first line of defense in maintaining the safety and security of the U.S. financial system,” said Assistant Attorney General Polite of the Justice Department’s Criminal Division.  “That is why the law requires that companies who avail themselves of the U.S. financial system provide financial institutions with truthful information about their business operations. Meng Wanzhou, CFO of Huawei Technologies, admitted that she failed to tell the truth about Huawei’s operations in Iran, and as a result the financial institution continued to do business with Huawei in violation of U.S. law. Our prosecution team continues to prepare for trial against Huawei, and we look forward to proving our case against the company in court.”

“Meng’s admissions are evidence of a consistent pattern of deception to violate U.S. law.  The FBI will continue to aggressively investigate companies doing business in the United States when there are signs they behave with contempt for our laws,” stated FBI Assistant Director Kohler.

The Scheme to Defraud Financial Institutions

According to court filings, and as agreed to by Meng in the DPA’s statement of facts, Skycom Tech was a Hong Kong company that primarily operated in Iran.  As of February 2007, Skycom was wholly owned by a subsidiary of Huawei Technologies, Hua Ying Management.  In November 2007, Hua Ying transferred its shares of Skycom to another entity that Huawei controlled, Canicula Holdings.  At the time Hua Ying transferred its Skycom shares to Canicula, Meng was the secretary of Hua Ying.

In February 2008, after Huawei transferred ownership of Skycom from Hua Ying to Canicula, Meng joined Skycom’s board of directors, which was comprised of Huawei employees.  She served on the board until April 2009.  After Meng departed from Skycom’s board, Skycom’s board members continued to be Huawei employees, Canicula continued to own Skycom, and Canicula continued to be controlled by Huawei.  As of August 2012, Huawei included Skycom among a list of “other Huawei subsidiaries” in Huawei corporate documents written in English.

Between 2010 and 2014, Huawei controlled Skycom’s business operations in Iran, and Skycom was owned by an entity controlled by Huawei.  All significant Skycom business decisions were made by Huawei.  Moreover, Skycom’s country manager—the head of the business—was a Huawei employee.  Individuals employed by Skycom believed they worked for Huawei.

During the same time period, Huawei employees engaged with a UK staffing company to provide engineers in Iran to support Skycom’s work with Iranian telecommunications service providers.  Negotiations and contracting on behalf of Skycom were conducted by Huawei employees.  To pay for these contractors, Huawei sent at least $7.5 million to the UK staffing company in a series of approximately 80 payments from Skycom’s bank accounts in Asia, including at a multinational financial institution (Financial Institution 1), to the UK staffing company’s account in the United Kingdom.  The transactions were denominated in U.S. dollars and cleared through the United States.

In December 2012 and January 2013, various news organizations, including Reuters, reported that Skycom offered to sell “embargoed” equipment from a U.S. computer equipment manufacturer in Iran in potential violation of U.S. export controls law, and that Huawei had close ties with Skycom.  In a statement to Reuters published in a December 2012 article, Huawei claimed that Skycom was one of its “major local partners” in Iran.  Reuters reported that Huawei had further stated that “Huawei’s business in Iran is in full compliance with all applicable laws and regulations including those of the U.N., U.S. and E.U.  This commitment has been carried out and followed strictly by our company.  Further, we also require our partners to follow the same commitment and strictly abide by the relevant laws and regulations.”

In January 2013, a subsequent Reuters article reported that Meng had served on the board of directors of Skycom between February 2008 and April 2009 and identified other connections between Skycom directors and Huawei.  The article also quoted the following statement from Huawei: “The relationship between Huawei and Skycom is a normal business partnership. Huawei has established a trade compliance system which is in line with industry best practices and our business in Iran is in full compliance with all applicable laws and regulations including those of the UN. We also require our partners, such as Skycom, to make the same commitments.”  This statement was incorrect, as Huawei operated and controlled Skycom; Skycom was therefore not Huawei’s business “partner.”

After these articles were published, Financial Institution 1 and other global financial institutions that provided international banking services to Huawei (collectively, the Financial Institutions), including U.S. dollar-clearing, made inquiries to Huawei in response to the above-described press reports.  In early 2013, Huawei employees represented to the Financial Institutions that Skycom was just a local business partner of Huawei in Iran and that Skycom had not conducted Iran-related transactions using its accounts at the Financial Institutions.

To address the allegations in the news reports, Huawei requested an in-person meeting with a senior Financial Institution 1 employee.  That meeting occurred on Aug. 22, 2013, in Hong Kong, at which time Meng met with an executive of Financial Institution 1 responsible for operations in the Asia Pacific region.  During the meeting, Meng delivered a PowerPoint presentation written in Chinese, which was translated by an interpreter into English.  Meng stated that she was using an interpreter to be precise in her language.

In her presentation, Meng stated, among other things, that Huawei’s relationship with Skycom was “normal business cooperation” and “normal and controllable business cooperation,” and she described Skycom as a “partner,” a “business partner of Huawei,” and a “third party Huawei works with” in Iran.  Those statements were untrue because, as Meng knew, Skycom was not a business partner of, or a third party working with, Huawei; instead, Huawei controlled Skycom, and Skycom employees were really Huawei employees.  It would have been material to Financial Institution 1 to know that Huawei controlled Skycom.

In addition, Meng stated that Huawei “was once a shareholder of Skycom” but had “sold all its shares in Skycom.”  Those statements were untrue, because, as Meng knew, Huawei had “sold” its shares to an entity that Huawei controlled. Specifically, Huawei transferred Skycom shares from a Huawei subsidiary (Hua Ying) to another entity that was controlled by Huawei (Canicula).  It would have been material to Financial Institution 1 to know that Skycom was transferred from one Huawei-controlled entity to another.

Finally, Meng stated that Huawei “operates in Iran in strict compliance with applicable laws, regulations and sanctions” and that “there has been no violation of export control regulations” by “Huawei or any third party Huawei works with.”  These statements were untrue because Huawei’s operation of Skycom, which caused the Financial Institutions to provide prohibited services, including banking services, for Huawei’s Iran-based business while Huawei concealed Skycom’s link to Huawei, was in violation of the U.S. Department of the Treasury’s Office of Foreign Assets Control’s Iranian Transactions and Sanctions Regulations, 31 C.F.R. Part 560.  Moreover, between 2010 and 2014, Huawei caused Skycom to conduct approximately $100 million worth of U.S.-dollar transactions through Financial Institution 1 that cleared through the United States, at least some of which supported its work in Iran in violation of U.S. law, including $7.5 million for Iran-based contractors from the UK staffing company to do work in Iran.

At no point during or after the meeting did Meng, who was aware of Huawei’s public statements about Skycom in Reuters, retract or amend any of those statements.  Moreover, Huawei’s treasurer, who also attended the August meeting, did not correct or amend any of the statements made by Meng.

Shortly after the meeting between Meng and Financial Institution 1, Huawei prepared an English version of the PowerPoint presentation at Financial Institution 1’s request.  Meng later arranged for a paper copy of that PowerPoint presentation to be delivered to the Financial Institution 1 executive she had met with in September 2013.  The representations in the English version of the PowerPoint presentation closely tracked the ones Meng had made during the meeting.

After the meeting and subsequent to receipt of Meng’s PowerPoint presentation, Financial Institution 1 decided to continue its relationship with Huawei.  The other Financial Institutions similarly continued their respective relationships with Huawei.


Under the terms of the DPA, Meng has agreed to the accuracy of a four-page statement of facts that details the knowing false statements she made to Financial Institution 1.  Meng also has agreed not to commit other federal, state or local crimes.  If Meng breaches the agreement, she will be subject to prosecution of all of the charges against her in the third superseding indictment filed in this case.  The government also agreed to withdraw its request to the Ministry of Justice of Canada that Meng be extradited to the United States.

Assistant U.S. Attorneys Alexander A. Solomon, Julia Nestor, David K. Kessler, Sarah M. Evans, and Meredith A. Arfa, MLARS Trial Attorneys Laura Billings and Christian Nauvel, and CES Trial Attorneys Thea D. R. Kendler, David Lim and R. Elizabeth Abraham are in charge of the prosecution, with assistance provided by Assistant U.S. Attorneys Brian Morris and Brendan King of the Eastern District of New York’s Civil Division and Trial Attorneys Andrew Finkelman, Margaret O’Malley, and John Reisenberg of DOJ’s Office of International Affairs.

Extradition in Canada

On Sept. 24, the Department of Justice Canada issued the following statement:

Today, counsel for the Department of Justice attended a case management conference regarding the extradition proceedings for Meng Wanzhou. We informed the Court that on Sept. 24, the U.S. Department of Justice withdrew their request for Canada to extradite Meng Wanzhou to the United States. As a result, there is no basis for the extradition proceedings to continue, and the minister of justice’s delegate has withdrawn the Authority to Proceed, ending the extradition proceedings. The judge released Meng Wanzhou from all of her bail conditions. Meng Wanzhou is free to leave Canada.

Canada is a rule of law country. Meng Wanzhou was afforded a fair process before the courts in accordance with Canadian law. This speaks to the independence of Canada’s judicial system.