AT&T CEO Randall Stephenson knows his company can't use Huawei's gear for high-speed networks, because the U.S. government won't allow it. But in Europe, the Chinese networking company has dominant market share, which is a problem as the world gears up for the move from 4G to 5G, Stephenson said on Tuesday at the Fintech Ideas Festival in San Francisco.
That's because Huawei doesn't work with other suppliers.
"Huawei does not facilitate interoperability from 4G to 5G other than their own networks," said Stephenson, in an interview on stage with CNBC's Andrew Ross Sorkin. "How comfortable are you if you're a senior person in one of these countries that that much of your infrastructure that's underpinning this much of our social interaction is being supplied by — i don't care if it's Huawei — but by a Chinese company?"
In the U.S., Huawei's equipment has been subject to several bans and threats of other penalties. Most notably, the company, alongside Chinese competitor ZTE, was mostly banned from doing government contract work by the 2019 Defense Authorization Act. The U.S. has cited intelligence reports that claim Huawei was built with intractable ties to Chinese intelligence to provide equipment that could be used for espionage.
European nations have shunned U.S. calls to take the same approach to Huawei, and Huawei has rejected the allegations of spying and launched a lawsuit against the U.S. government. It's maintained that the U.S. intelligence community's concerns were driven by U.S. technology competition or trade deal negotiations.