LG Uplus Under Pressure to Cut Ties with Huawei

LG Uplus Corp.’s logo at its headquarters building in Seoul. (Yonhap)

SEOUL, July 24 (Korea Bizwire) — Amid the escalation of U.S.-China tension, LG Uplus Corp., one of South Korea’s largest mobile operators, found itself in a perplexing situation as a high-ranking U.S. official publicly called for the company to sever ties with China’s biggest telecommunications equipment maker, Huawei.

Robert Strayer, deputy assistant secretary of state for cyber and international communications and information policy, called for LG Uplus to switch to ‘trusted vendors’ at a briefing session hosted on Tuesday by the New York Foreign Press Center.

On July 14, U.S. Secretary of State Mike Pompeo publicly touted SK Telecom Co. and KT Corp. – LG Uplus’ main rivals – as ‘clean carriers,’ urging other telecom operators to join the move against Huawei.

LG Uplus is the only one of South Korea’s three major telecom operators that uses Huawei equipment. The company couldn’t hide its embarrassment when the U.S.-led anti-Huawei campaign was launched.

In reality, it’s de facto impossible for LG Uplus to fully replace Huawei equipment with that of other manufacturers.

Chinese telecom equipment maker Huawei’s logo is shown at its booth at MWC Barcelona, the world’s largest mobile show, on Feb. 26, 2019. (Yonhap)

At present, LG Uplus is using 5G equipment from four network equipment providers – Huawei, Samsung Electronics, Nokia and Ericson.

LG Uplus is employing a regional-specific approach to the use of 5G equipment and the Huawei equipment is used mainly for the key region of Seoul and its surrounding areas.

The 5G service (3.5 GHz spectrum) that South Korea commercialized last year for the first time in the world is a non-standalone mode which can run in parallel with existing LTE service.

Under this structure, the connection between LTE base stations and 5G base stations is essential.

Among LG Uplus’ LTE base stations, which are estimated at about 240,000 nationwide, about 96,000 LTE base stations that cover the key region of Seoul and its surrounding areas are Huawei equipment.

Against this backdrop, the cost of replacing all of Huawei’s 5G and LTE equipment with that of other manufacturers would be astronomical for LG Uplus.

J. S. Shin (js_shin@koreabizwire.com)