CANBERRA, Australia – Chinese telecommunications giant Huawei on Monday announced it was ending its oldest major sports sponsorship deal in the world by terminating its contract with Australian rugby league team Canberra Raiders after nine years, accusing an “always negative business environment”.
Australia has banned the world’s largest switchgear maker and a major smartphone brand from getting involved in critical national communications infrastructure in recent years, while China has stepped up pressure for a reversal of the Australian politics.
Huawei will end its financial support for the Raiders at the end of the current National Rugby League season. The grand finale will take place on October 25.
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Last year, Huawei renewed its sponsorship contract for two years until the end of the 2021 season.
“The still negative business environment is having a bigger impact than initially expected on our expected revenue stream and therefore we will have to end our major Raiders sponsorship at the end of the 2020 season,” a statement from Huawei said.
The Raiders are the only national competition team based in the Australian capital Canberra, the center of government and national policy-making.
Huawei’s landmark decision to sponsor the team in 2012 came months after the government banned the company, for security reasons, from participating in the deployment of Australia’s national broadband network in 2011.
The sponsorship was seen as an attempt to improve Huawei’s public image in the eyes of lawmakers and senior officials who call on the Canberra team.
Raiders board member Dennis Richardson, former head of the Department of Defense and the main national spy agency, Australian Security Intelligence Organization, had been a staunch supporter of the Huawei sponsorship deal.
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Huawei Australia chief executive officer Jeremy Mitchell has suggested that a decision by Prime Minister Malcolm Turnbull’s government in 2018 to ban the company from Australian 5G networks was at least part of the sponsorship decision.
“Even after the Turnbull government banned us from 5G, we were able to find the resources to continue the sponsorship, but we just can’t support it financially,” Mitchell said in a statement.
The statement makes no mention of the impact of the coronavirus pandemic on the business environment.
Raiders general manager Don Furner said the team was “very sad” to lose their main sponsor. Neither Huawei nor the team have ever made the value of sponsorship public.
“The Canberra and Huawei Raiders have enjoyed a fantastic partnership for almost a decade – they are by far our main main sponsor,” Furner said in a statement.
China has made Australia lift its ban on Huawei’s critical infrastructure, a condition for the recovery of strained bilateral ties. The diplomatic relationship has since deteriorated because Australia called for an independent inquiry into the origins and international responses to the coronavirus pandemic.GET FOX BUSINESS ON THE ROAD BY CLICKING HERE
The Raiders have had more success in recent years. The Raiders were finalists for premier last year and are ranked fifth in the current season. They last won a prime ministerial post in 1994.
Huawei is at the center of a major conflict between Washington and Beijing over technology and security. U.S. officials say Huawei poses a security risk, which the company denies, and is pressuring Europeans and other allies to avoid its technology when upgrading to next-generation networks.
China, for its part, is trying to encourage Europeans to guarantee access to their markets for Chinese telecommunications and technology companies.
Huawei is in pain as Washington steps up its campaign to slam the door on access to foreign markets and the components of its growing feud with Beijing.
European and other phone operators who have purchased Huawei hardware despite US pressure are removing it from their networks. Huawei had a glimmer of good news by overtaking rivals Samsung and Apple as the No.1 smartphone brand in the quarter ending June thanks to sales in China, but overseas demand is on the decline.