British Telecom unit EE and Vodafone Group PLC have dropped Huawei Technologies Co. Ltd.'s phones from their impending 5G network launches, a move that could benefit rival Chinese manufacturers.
The abrupt move comes just days after Google LLC pulled Huawei's Android license following the U.S. government's ban of the Chinese telecom-equipment supplier, throwing doubt over the future of its smartphones in Europe, its second-biggest market after its native China. The U.S. imposed a 90-day grace period on May 21 for local companies dealing with Huawei, but it remains unclear how Google will react if the company is placed back on the so-called "Entity List."
Paolo Pescatore, a telecom analyst at PP Foresight, said the removal of Huawei by the two leading operators is not surprising.
"The lack of any Huawei 5G smartphones is noticeable. A move that makes sense for now," Pescatore said. "Consumers are starting to be wary about Huawei products and quite possibly other Chinese products. This will have a negative impact on 5G consumer take-up in the short term."
The move presents an opportunity for smaller smartphone manufacturers to take market share, Pescatore added.
Ben Stanton, senior tech analyst at Canalys, believes that OnePlus Technology (Shenzhen) Co. Ltd., Xiaomi Corp. and Guangdong Oppo Electronics Industry Co. Ltd are best positioned to take advantage of Huawei's troubles, thanks to the competitive pricing the three upstarts offer.
Stanton said the precariousness over Huawei was disrupting operators' 5G phone lineups, with networks normally testing devices up to nine months in advance of stocking them. As reported in March, security concerns surrounding Huawei's core 5G network equipment were impacting smartphone orders in Europe.
"The uncertainty around Huawei makes portfolio planning difficult," Stanton said. "How can an operator commit to ranging the next Huawei device now, if they don’t even know what operating system it will use, or if Huawei will have enough components to give them a good allocation?
"This is the question EE and its peers are grappling with. The solution, it seems, is to delay making that decision as long as possible and see if the political headwinds change."
EE's range of 5G-enabled smartphones includes the OnePlus 7 Pro 5G and Oppo Reno 5G — both listed as exclusive to the network — alongside the Samsung Galaxy S10 5G and the LG V50 ThinQ.
Marc Allera, CEO of BT consumer brands, including EE, reportedly said it was not prepared to launch Huawei's 5G-enabled phone until it could be certain of its long-term usability.
"Until we get the information and confidence that gives us the long-term surety that our customers, when they buy those devices, are going to be supported for the lifetime they've got the device with us ... we've put those devices on pause," Allera said at EE's 5G event in London May 22.
Vodafone, meanwhile, has paused preorders of Huawei's Mate 20X (5G) in the U.K. "This is a temporary measure while uncertainty exists regarding new Huawei 5G devices. We will keep this situation under review," the company said.
Huawei is reportedly working on its own operating system, although reports say it is not ready.
The shockwaves following Google's announcement are also being felt outside of Europe. Leading Japanese mobile operators KDDI Corp. and SoftBank Corp. reportedly said May 22 that they would delay sales of Huawei's latest smartphones for their respective networks, citing uncertainty over Google's Android ban.