An annual defense bill is said to receive a vote from the U.S. House of Representatives and will include a budget of $3 billion that will allow telecom companies to replace the existing hardware made by companies like Huawei, ZTE, and others. This paraphernalia will be replaced with local parts, officially addressing the security risks that these devices supposedly pose.
The FCC has previously said that removing Huawei’s telecom is estimated to cost $4.98 billion; current budget may have to be revised to ensure complete hardware replacement
Huawei and ZTE have been in the U.S. crosshairs since 2019 when, slowly but surely, the trade sanctions pushed various Chinese entities into a corner. According to Reuters, another step that the U.S. government is taking is ensuring that no security risk exists when using telecom equipment mass produced by the aforementioned companies. However, replacing each and every part will be an uphill challenge, not to mention a costly move from the U.S. The Federal Communications Commission has previously said that purging equipment from overseas sources will require a budget of $4.98 billion.
Previously, the Congress had only approved $1.9 billion, meaning that there is a hefty shortfall that hangs in the balance. The report mentions that the FCC Chair Jessica Rosenworcel asked the U.S. Congress last week to urgently provide additional funding to replace the equipment in the networks of 126 carriers. Rosenworcel has warned that the lack of funding could result in some rural networks shutting down, compromising the 911 service. The FCC Chair is not the only high-ranking official who has voiced concerns over the prompt replacement of Chinese telecom equipment.
Competitive Carriers Association CEO Tim Donovan on Saturday praised the latest announcement, while also stating that there is a desperate need to secure funding while maintaining connectivity for tens of millions of Americans. Some countries that fall under the EU umbrella have also been advised to replace Huawei equipment, but as you would expect, lots of these regions are hesitant to make the move because of the exorbitant cost.
Furthermore, it does not help that Huawei and ZTE are the most dominant players in this category, meaning that no other supplier can compete on the same pricing field as these two, making it even more taxing on the government’s budget.
News Source: Reuters
About the author: Omar Sohail is a reporter and analyst for Wccftech's mobile section, specializing in the technology and business of the mobile industry. His expertise lies in the intricate hardware supply chain, covering developments in semiconductor manufacturing, chip lithography, and camera sensor technology.
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