Malaysia’s Axiata to pick two 5G vendors, in move that could curb reliance on Huawei

Malaysia's Axiata to pick two 5G vendors, in move that could curb reliance on Huawei

FILE PHOTO: A woman walks past the Axiata headquarters building in Kuala Lumpur, Malaysia, October 1, 2019. REUTERS/Lim Huey Teng

KUALA LUMPUR (Reuters) – Axiata Group Bhd, Malaysia’s third-biggest telecom operator by subscribers, said it would select two equipment suppliers to roll out 5G services, opening the door for the likes of Ericsson to fight it out with dominant player Huawei.

Huawei Technologies [HWT.UL], the world’s top telecoms equipment maker, has been a long-time vendor for Axiata and the two companies have a preliminary agreement to work together on deploying Malaysia’s fifth-generation (5G) technology services, slated for later this year.

Axiata, which is eyeing spending at least $1 billion over as many as five years on the cutting edge technology at home, has not yet signed any other 5G agreement.

“Generally we like to have two vendors, and in Malaysia, generally it would be these two,” Axiata Chief Executive Jamaludin Ibrahim told Reuters on Saturday, referring to Huawei and Sweden’s Ericsson.

He said others such as Finland’s Nokia and China’s ZTE would also be invited to participate in a tender that would eventually decide the two suppliers.

Axiata is confident of securing supplies from Huawei despite the U.S. Commerce Department this month expanding the country’s authority to require licenses for sales to Huawei of semiconductors made abroad with U.S. technology. The United States says Huawei’s equipment can spy on customers, a charge the company denies.

Jamaludin said the security matters have been discussed between its representatives, the government and Huawei.

“You can’t be very sure, but what assurance we have been getting from Huawei, we are confident,” he said. “We have (also) been assured many times that despite all the relationship with some countries they will survive and they will be able to supply us, there will be continuity.”

Jamaludin said Axiata could spend at least $1 billion on 5G in Malaysia over the next three to five years and was in talks with rivals to jointly deploy the services with one or two partners to cut costs. He declined to name the parties.

Reporting by Krishna N. Das; Editing by Muralikumar Anantharaman

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Sharon Ross

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