The strategy allows Canada to stay on the safe side of China and the United States as they fight over Huawei Technologies Co Ltd, say six well-placed sources with first-hand knowledge of the matter.
Canada and its Five Eyes allies – the UK, New Zealand and Australia – are under pressure from fellow Americans to oust Huawei for security reasons.
5G networks offer data speeds up to 50 or 100 times faster than 4G networks and should power everything from telemedicine and remote surgery to self-driving cars.
Canada has been considering whether to phase out next-generation equipment from the company for nearly two years, erasing growing signs of industry impatience.
In June, Bell Canada (BCE.TO) and its rival Telus Corp (T.TO) – two of the largest wireless service providers – have teamed up with Sweden’s Ericsson (ERICb.ST) and Nokia Corporation (NOKIA.HE) to build fifth generation (5G) telecommunications networks, abandoning Huawei for the project despite the use of Huawei 4G equipment.
“The absence of a solution will eventually solve all the problems,” said a source directly familiar with the approach taken by the Liberal government of Canadian Prime Minister Justin Trudeau.
Rogers Communications Inc (RCIb.TO), Canada’s other major wireless operator, announced in 2018 that it was using Ericsson 5G equipment.
Earlier this month, the Trump administration said it would further tighten U.S. restrictions on Huawei, in an effort to restrict its access to commercially available chips.
Operators in Canada believe the U.S. restrictions mean they have no choice but to push Huawei out of 5G networks, at least for now, say the sources, who requested anonymity in view of the sensitivity of the situation.
“They did the political math and said, ‘The best thing for us is to do nothing and if we don’t do anything we don’t bother the Chinese, we don’t bother the Americans,” said a source familiar with which government. say officials.
Staying on the good side of China has become an important consideration. Huawei CFO Meng Wanzhou has been fighting extradition to the United States since Canadian police detained her in December 2018.
In response, Beijing arrested Canadian citizens Michael Spavor and Michael Kovrig, accusing them of espionage. Canada says winning their freedom is a top priority.
“Without the two Michaels, Canada would have already said it would not use Huawei 5G technology,” a diplomatic source said. Government officials deny that the fate of the two men is linked to 5G.
In 2018, Australia and New Zealand prohibited service providers from using Huawei 5G equipment.
Of course, Canada will one day make a decision. Two other people who have consulted with Canadian officials say it is only a matter of time before Ottawa unveils a ban.
But a source directly familiar with government thinking stressed that Ottawa had yet to come to a firm conclusion and would not be rushed, adding that officials were taking their time to avoid Britain’s predicament.
The UK government announced last month that it would ban Huawei from accessing 5G networks by ordering companies to remove the equipment by 2027. In January, it initially said Huawei could play a limited role in the 5G.
“It shows why you have to do it right and why you only have one chance… we don’t want to end up in a situation like the British where we have to go back and put the toothpaste back in the tube. The source said.
The office of Canadian Innovation Minister Navdeep Bains – who is officially responsible for making a decision on Huawei and 5G – said in a statement it could not comment on a particular company. He did not say when an announcement would be made.
A Bell spokesperson noted that in May, chief executive Mirko Bibic said he had no idea what the government’s thinking on Huawei and 5G is. Telus did not respond to a request for comment.
Huawei said in a statement that it believes Ottawa “when it says it’s taking the time to make a thoughtful decision.”
Reporting by David Ljunggren; Additional reporting by Steve Scherer in Ottawa; Editing by Amran Abocar, Steve Scherer and Lisa Shumaker
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