Huawei cloud, services gain toehold in developing countries

While the U.S., U.K. and other developed countries have banned the use of Huawei equipment in their 5G networks, the Chinese company has plenty of customers for its cloud infrastructure and e-government services according to the “Reconnecting Asia Huawei Cloud & e-Government Data” report from the Center for Strategic and International Studies (CSIS).

The May 17 report identified 70 deals in 41 countries between Huawei and foreign governments or state-owned enterprises. The company is focusing on emerging markets and offering not just cloud infrastructure and services, but also financing from Chinese policy banks. Bundling infrastructure and services, it promises its cloud solutions can reduce government operating costs and simplify services delivery.

The equipment and services being deployed range from small, modular data centers to multi-level buildings packed with servers. E-government applications run from document digitization and tax services to national ID systems, crisis communications, elections and more, the report said.

“Despite facing legal and reputational challenges, Huawei’s offers are still gaining traction, with nearly half of the deals with known start dates announced since 2018,” CSIS said. The countries working with Huawei tend to share three characteristics: They are African or Asian, middle income and considered non-liberal, with 77% of deals are with countries that are considered either “not free” or “partly free,” according to Freedom House ratings.

CSIS called for action from the U.S. and its allies, which already have superior cloud products to offer, but have been unable to effectively compete in developing markets without better financing infrastructure and funding for technical assistance.

“In this contest, developing economies are valuable testing grounds and prizes in their own right, offering strong demand, fewer barriers to entry, and less scrutiny than developed economies,” CSIS said. Gaining a foothold in governments could give the company and Chinese authorities intelligence and even coercive leverage, the report suggested.