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LG Uplus in hot water over Huawei equipment amid U.S. pressure

All News 15:31 July 24, 2020

By Chae Yun-hwan

SEOUL, July 24 (Yonhap) -- Faced with mounting pressure to replace Huawei Technologies Co.'s 5G equipment, South Korean telecom giant LG Uplus Corp. claimed Friday that the Chinese firm's telecom equipment does not pose security risks.

Earlier this week, Robert Strayer, the U.S. deputy assistant secretary of state for cyber and international communications and information policy, urged telecom operators using Huawei's equipment, including LG Uplus, to switch to "trusted vendors," citing security issues.

The United States has long accused Huawei, the world's leading vendor of 5G network equipment, of spying, claiming that the company can compromise the country's internet communications and steal sensitive information.

In response to the U.S. official's comments, LG Uplus, the only local carrier using Huawei's 5G equipment, said the Chinese tech giant has proven its equipment's security, hinting that it will not cut ties with Huawei.

"The carrier and the equipment provider have done all they can in terms of proving security," an LG Uplus spokesperson said.

LG Uplus Corp.'s headquarters in central Seoul is shown in this file photo taken on July 23, 2020. The United States urged LG Uplus and other telecom operators that use Huawei products to switch to other vendors, citing security risks. (Yonhap)

Local industry experts say LG Uplus has much to lose if it decides to replace Huawei products, considering the two companies' business partnership over the years.

"LG Uplus faces equipment compatibility issues if it switches to other 5G equipment providers since it has used Huawei products for 4G LTE services," said Kim Jong-ki, a research fellow at the Korea Institute for Industrial Economics & Trade. "An abrupt change would be costly and delay its plans to deploy 5G."

The company currently uses 5G equipment from not only Huawei, but also other major 5G equipment vendors, such as Samsung Electronics Co., Finland's Nokia Corp. and Sweden's Ericsson.

The LG Uplus spokesperson declined to specify the share of Huawei equipment of the total, while explaining that the company's equipment is currently installed in the wider capital region and Gangwon Province.

The pressure is weighing on LG Uplus as it tries to catch up to rivals in attracting 5G users.

The company had 1.7 million 5G subscriptions here as of May, compared with SK Telecom Co. at 3.1 million and KT Corp. at 2.1 million, according to ICT ministry data.

The three carriers said last week they will commit up to 25.7 trillion won (US$21.5 billion) to build a nationwide 5G network by 2022.

LG Uplus workers test the carrier's 5G base station at a beach in Ulsan, 307 kilometers southeast of Seoul, in this photo provided by LG Uplus on July 28, 2019. (PHOTO NOT FOR SALE) (Yonhap)

The mounting pressure against LG Uplus also comes as local major carriers, including SK Telecom and KT, are in search for new 5G equipment suppliers as they target to test 5G on the 28-gigahertz (GHz) band, which promises faster speeds than the current 3.5 GHz band, by the end of this year.

So far, LG Uplus remains tight-lipped over its new equipment plans.

"We have not yet decided on equipment providers for the 28GHz band," another spokesperson for LG Uplus said, adding that there are currently no plans to exclude any particular company.


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