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How Huawei controls telecom infrastructure in Brazil

. Jun 27, 2019
How Huawei controls telecom infrastructure in Brazil

The G20 Summit in Japan will mark Brazilian President Jair Bolsonaro’s first meeting with his Chinese counterpart, Xi Jinping. The get-together is expected to be “informal and brief,” but crucial for Brazil. 

China is the country’s undisputed top trading partner, accounting for 26 percent of all Brazilian exports. Since taking office in January, Mr. Bolsonaro has toned down the anti-Beijing rhetoric of his campaign—and his administration has made concrete efforts to build better relations with the Asian giant, including sending Vice President Hamilton Mourão and Agriculture Minister Tereza Cristina on official trips, with Mr. Bolsonaro himself planning to go there himself in August.

In light of the above, recent remarks from Foreign Minister Ernesto Araújo have been puzzling. Contradicting what Vice President Mourão told Chinese government officials just one month ago, Mr. Araújo told a weekly magazine that blocking the operations of telecom behemoth Huawei in Brazil is not off the table.

</span></p> <p><span style="font-weight: 400;">&#8220;We want to understand more about what the eventual problems would be, from a technical perspective, of relying on Huawei technology. It is a job that needs to be done, because we know there are worries from the Americans. We want to understand these concerns,&#8221; he said.</span></p> <p><script src="https://www.buzzsprout.com/299876/1078940-57-how-should-brazil-deal-with-china.js?player=small" type="text/javascript" charset="utf-8"></script></p> <h2>Understanding the beef with Huawei</h2> <p><span style="font-weight: 400;">Huawei is the world&#8217;s leading provider of telecommunication networks, ahead of Ericsson and Qualcomm. As the trio rush to develop 5G networks, some governments are trying to keep Huawei hardware out of anything being built. The Trump administration even issued a ban forbidding U.S. government contractors from using the components produced by the Chinese company.</span></p> <p><span style="font-weight: 400;">There is a fear—though not yet backed up by hard evidence—that Huawei hardware could have backdoors which would allow the Chinese government to monitor and control networks across the globe—or even try to insert malware in government systems. Following the U.S.&#8217; footsteps, Australia and New Zealand have also adopted restrictions on Huawei.</span></p> <h2>The amazing presence of Huawei in Brazil</h2> <p><span style="font-weight: 400;">Huawei has been in Brazil for the past 21 years—and has had little success in the smartphone market. Back in 2014, the giant launched its first model in Brazil, but it failed to catch on. It is now making its second attempt to crack the market with three flagship models.</span></p> <p><span style="font-weight: 400;">But don&#8217;t let its shortcomings selling smartphones fool you.</span></p> <p><span style="font-weight: 400;">The company directly employs 1,500 people—and is responsible for a chain that creates 10,000 jobs. It has four main offices (São Paulo, Rio de Janeiro, Curitiba, and Recife), and a logistics center in Sorocaba, roughly 90 km from São Paulo. Between 2015 and 2018, it raised BRL 1.9 billion in equipment sales alone.</span></p> <p><span style="font-weight: 400;">According to the National Telecommunications Agency (Anatel), the Chinese giant has built roughly 70,000 of the country&#8217;s 86,000 operational radio antennas. These devices are responsible for transmitting 3G, 4G, and LTE frequencies to smartphones, modems, credit card machines … basically any device connected to a mobile network.</span></p> <p><span style="font-weight: 400;">That puts telecom providers in Brazil at the mercy of Huawei, and they have no interest in picking a fight with them. While many western countries are afraid of what a Huawei-controlled 5G could become, in Brazil, companies are willingly testing the technology with the Chinese group. </span></p> <p><span style="font-weight: 400;">TIM Brazil—a subsidiary of Telecom Italia—has begun 5G trials in the southern city of Florianópolis, using Huawei equipment.</span></p> <p><span style="font-weight: 400;">For some, however, this leadership status is cause for concern. &#8220;Huawei is from a country with a controlling government. When we consider that in the future all electronic equipment will be connected to the internet, we have to ask who is able to control the network. [Donald] Trump is not crazy [in having suspicions]. The problem is that we can&#8217;t tell what&#8217;s true and what&#8217;s theatrics in his rhetoric,&#8221; says Alvaro Luiz Massad Martins, an information technology professor and director at Insight Marketing. </span></p> <p><span style="font-weight: 400;">During this year&#8217;s Carnival celebrations, Huawei tested its facial recognition system in Salvador and Rio de Janeiro. And the company’s representative at a congressional hearing, sales manager Ricardo Mansano, used the conservative, tough-on-crime zeitgeist in Brazil to push for more surveillance: “We can’t live in a country where we are held hostage by criminals,” he declared. </span></p> <h2>A deeper problem</h2> <p><span style="font-weight: 400;">Banning Huawei from Brazil would not necessarily make the country&#8217;s telecommunications safer, however. Let&#8217;s not forget the revelations that the U.S. National Security Agency bugged phone lines from Brazilian government officials (including former President Dilma Rousseff), as well as Petrobras executives.</span></p> <p><span style="font-weight: 400;">&#8220;Brazil has not developed its own technology to successfully replace components made by foreign groups. Our government should have been concerned about data security, but it has remained a hostage to foreign interests because everything Brazil uses—both hardware and software—comes from abroad,&#8221; says Marcelus Guirardello, an expert in telecommunications and teacher at the Paula Souza Center in São Paulo.</span></p> <p><span style="font-weight: 400;">Speaking to </span><b>The Brazilian Report</b><span style="font-weight: 400;">, Huawei Brazil&#8217;s Technology Director Nicolas Driesen called any accusations of security threats &#8220;unfounded.&#8221; Mr. Driesen says the company &#8220;has an excellent partnership with the Brazilian government,&#8221; and &#8220;has kept dialogues about the best practices [in Brazilian territory].&#8221;</span></p> <p><span style="font-weight: 400;">And he doesn&#8217;t seem phased by any threats: &#8220;There remains a big market in Brazil to be explored.&#8221;

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Beatriz Farrugia

Beatriz Farrugia has ten years of experience working for international news agencies. She is a former editor at ANSA and holds a post-graduate degree in International Relations from Fundação Getulio Vargas

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