Huawei’s Latin America Crisis
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I mean, speaking of PLA, there's another very active company in Latin America that has ties to the PLA, Huawei. There was just recently the big scandal where Belgium police officers raided Huawei offices. There was a lot of lobbying being done on behalf of Huawei in the EU. I understand Huawei has a pretty big footprint in Latin America as well. Yeah, Huawei has...

actually increase their efforts in engaging at a local level. So what they are doing is providing scholarships, providing paid trips, providing training and providing hardware, but at a local level a lot. That is the main change in strategy that you could see in the last two to three years.

In terms of lobby, I mean, in the Belgium case, it was basically paying members of the European Union to read letters out loud and do a lot of... To represent, basically, the company interests in the EU. And in Latin America, I think it's pretty straightforward and they do it openly and there is no...

I don't think there is much doubt that they have the same strategies. In each country it's different, of course. The way they engage in Chile is very different from the way they would engage in a country like Venezuela, which is much weaker in terms of institutions, or Peru, or Brazil, which tries to be kind of like a regional leader. In the case of Chile, the

and this is in the book, what they do a lot is go to the government with very big projects. One of them, a critical one, was the trans-specific optic fiber cable.

And they tell them, oh, well, we have this amazing project. We're going to do the feasibility report on study. We're going to tell you how to build it. We're going to do the routes and tell you which option is cheaper, etc. This is what was done. And of course, it looks very good, right? You are providing a service to a state that is very useful for development because, of course,

More connectivity means more access to economic development, etc. There's an argument to be made there. And the big problem in the Chilean case, at least, is that when the Chilean government said, okay, so we like your project, but we want you to compete with other companies. But they said, oh, yeah, we can give you this document and we can compete, but only with Chinese companies.

And that is something that the Chilean government was very skeptical about. So they changed to another system. And actually, after that, at the end, the Humboldt project ended up being taken over by Google and later Google.

We have another one that connects through one. But at the time, that was the way in which they seemed to work. They would approach local governments with very big contracts, very good opportunities that looked very nice, provided that they wouldn't compete with any other company. And in the 5G public tender or in the optic fiber public tender, that was very,

very hard for Latin American countries because they tend to replicate the processes that other countries have made. And I think most countries in Latin America came to an agreement that they needed to conduct traditional public biddings or public tenders for their 5G process or their optic fiber processes. So that's why it seems that Huawei

tried to enter, but because of what was happening in Europe and the US and all this skepticism that was being built, they had some trouble doing it. Well, how big is Huawei's footprint in Latin America right now? How much of the market share do they have? Right now, and well, this is in the book, actually. Right now, I would say that is...

Less is around 25 percent to 30 percent behind Nokia and Ericsson so it seems like actually a lot of these countries have done a pretty good job of Keeping Huawei out. I mean assuming that's the goal. That's that would be my goal, but I'm not I'm not in charge of anything You're not a latin-american dictator. I am yet. No I just have to improve my Spanish

I think Spanish is all right. It really depends on the country. In Venezuela, China has a huge footprint. Actually, their ID card is made by ZTE. So it's basically made by China, their identification card. In Ecuador, you have a whole security system and surveillance system that is built

by Chinese companies. I think Huawei is this big company, this big name that sounds a lot and countries have tried to keep it or treat it with a lot of respect so they don't get questions later. But of course, China as a whole has many other companies. Now, what Huawei has changed in their strategy is that

Now they're engaging much more at a local level. They are doubling down on other technologies. I mean, there's no restriction for Huawei phones, for example, and a lot of because they're cheaper and they're not bad quality for Latin American standards. A lot of people are changing their phones to Chinese alternative. And that is something that they're achieving without any form of screening, because, of course, that's expensive.

A free market, right? Anyone can buy whatever phone they want that is in the market. I think something that would be interesting for you is what Costa Rica tried to do. They didn't succeed at doing it, but they tried.

And so what they did is when they opened the 5G process, they put a condition in the public tender, which said that only countries, only companies affiliated with countries that had signed the Budapest Convention on Cybercrime would be allowed to participate as providers for this public tender. So that happened. And that immediately rules out any Chinese company.

So, of course, there was a lot of backlash because of this and discrimination. Is this neutral or is this is this discretional or not or or bias, et cetera? And there was a little bit of pushback there, but it was a start. Right. They put a condition that did not point to China, but eventually limited Chinese access.

presence in these competitions. The other thing that happened is that because it's not Huawei that directly applies to these processes, but they partnered with a local provider, an operator. Some of the biggest operators in Latin America are international. For example, Movistar is a Spanish company.

And since in Europe, the whole issue with Huawei was boiling up and they were trying to limit Chinese presence in their company, they basically replicated what was happening in Europe in their Latin American strategy. So not only did they...

remove Huawei as a provider in the European market, they also did it in Latin America because it made no sense to have different providers for different parts of the company just because they were in different places. It was much, I guess, they wanted to prevent or anticipate any form of measure that could be taken by Latin American countries replicating what was happening in Europe, for example.

That's interesting. So a victory in Europe becomes defeat in Latin America. They learn.