Chinese telecom Huawei has been in the hot seat in Washington, the target of legislation and scrutiny on the Hill, a potential an on broadband subsidy money at the FCC and a consensus from the national security community that it is risky tech in critical systems, like a new 5G network.
But Fitch Solutions Macro Research (its analysts are separate from Fitch Ratings analysts), whose business is providing business intelligence, is advising its clients that it expects that government scrutiny of its security issues abroad "appears to have peaked," and while Fitch recognizes that the tech has been, and likely will be, restricted in the U.S. and Canada, it predicts a rosier future elsewhere.
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That is driven in part by the European Commission's decision not to ban Huawei tech from its 5G rollouts. Fitch says it expects other countries, who were worried about Chinese retaliation if they banned the tech, will likely follow the EC's lead.
"Overall, we expect that the cost effectiveness and reliability of Chinese-made telecoms equipment will be enough to override alleged security concerns for the large part of its target markets," said Fitch.
That clearly does not appear to be the case in the U.S. Congress responded added a phase-out of Huawei tech in government contracts to the Defense Authorization Act.
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Separately the FCC is considering its own limitations on Huawei, potentially denying networks with Huawei tech access to broadband subsidy money, which has prompted the Huawei pushback.
