Speaker 1: This deal was in many ways a proxy fight between
Speaker 1: the US and China or the future of you know, technology,
Speaker 1: dominance and technology kind of control. This very small country
Speaker 1: got caught in the middle.
Speaker 2: Bloomberg's Jordan Robertson and Drake Bennett are back on the
Speaker 2: show with another wild Who done it? They reported for
Speaker 2: Business Week. This time it's about China's tech giant Huawei
Speaker 2: and the company's extraordinary efforts to out maneuver its competitors
Speaker 2: to build a five G network in Denmark.
Speaker 3: So how did this information that's supposed to be some
Speaker 3: of the most protected information of the company get out
Speaker 3: to the last people in the world who should have
Speaker 3: known it.
Speaker 1: It wasn't until they actually got to look at his
Speaker 1: laptop that they were able to piece together. Oh, here's
Speaker 1: what happened.
Speaker 2: I'm West Kasova today on the Big Take, microphones, drones,
Speaker 2: and the search for mole. Jordan, your story starts with
Speaker 2: Denmark looking to upgrade its telecommunication system.
Speaker 1: Right just twenty nineteen, Denmark is looking to upgrade it's
Speaker 1: telecommunications network to five G and in fact, Denmark is
Speaker 1: going to be one of the first countries in Europe
Speaker 1: to upgrade to five G. Now they have two choices.
Speaker 1: There's Erickson from Sweden and there's Huawei from China. Now
Speaker 1: Huawei is the incumbent. Huawei has in some ways the
Speaker 1: advantage because Huawei had supplied the Danish Telecom, Denmark's biggest
Speaker 1: telecommunications provider, with equipment since twenty thirteen. Huawei was already there.
Speaker 1: Huawei was already in country.
Speaker 2: And in fact, Huawei was across a lot of countries
Speaker 2: in Europe, in Asia. They had become a really dominant
Speaker 2: player in this field. Is that right.
Speaker 1: Huawei had expanded aggressively outside of China over the preceding decade,
Speaker 1: providing three G and four G networks to the UK,
Speaker 1: of course, to Denmark and just throughout Europe. So Huawei
Speaker 1: was a very big player in ways that it never
Speaker 1: was really in the United States. You know, Huawei never
Speaker 1: really made that jump fully to the US. There's certainly
Speaker 1: Huawei equipment in the US, but it was not nearly
Speaker 1: as pervasive as it was in parts of Europe. So
Speaker 1: Denmark goes shopping for a five G provider. Huawei was
Speaker 1: already supplying its three G and four G equipment, but
Speaker 1: there were all of a sudden, there were these national
Speaker 1: security concerns. The Trump administration was kind of pounding the table,
Speaker 1: telling anybody who would listen, don't buy Huawei, go with
Speaker 1: a Nordic beat up company, Go with the Sweden's Erickson,
Speaker 1: or go with you know, Finland's Nokia. Go with anybody
Speaker 1: but Huawei.
Speaker 2: And why were they so insistent about not using Huawei.
Speaker 1: The US argument was that China could use this equipment,
Speaker 1: and not just it's the equipment, but the people that
Speaker 1: come with this equipment to facilitate spying. That is true,
Speaker 1: China could do that. In twenty twenty one, we published
Speaker 1: a story outlining an incident, a previously secret incident that
Speaker 1: had happened in Australia in twenty twelve, which really gave
Speaker 1: rise to the fears among Western allies, the US, Australia,
Speaker 1: you know, chief among them, the suspicion that Huawei would
Speaker 1: be used by China to spy was not just hypothetical.
Speaker 1: This incident in twenty twelve, the short version of it
Speaker 1: is the Australian Intelligence Services detected a breach, a very
Speaker 1: significant breach of Australia's telecommunication systems, and what they discovered
Speaker 1: was that China was inserting malware into the official Huawei
Speaker 1: updates that were applied to systems in Australia's telecommunications network
Speaker 1: by Huawei technicians. So Australia detects this major breach of
Speaker 1: its telecommunications systems in twenty twelve, it informs the Americans,
Speaker 1: and what happens was that was essentially the starting pistol
Speaker 1: for the US, Australia and other Western nations to kind
Speaker 1: of raise the red flag and say, whoa, this isn't
Speaker 1: just hypothetical that Huawei could be used to spy. Is
Speaker 1: actually happening, and it's happened in a really sophisticated, stealthy,
Speaker 1: hard to detect way that you could really only do
Speaker 1: if you have insiders control over that networking equipment.
Speaker 2: And what did Huawei say about that at.
Speaker 1: The time when we reported on that story, Huawei issued
Speaker 1: US a statement saying they'd never been told of a breach,
Speaker 1: and you know, our information was that US intelligence and
Speaker 1: Australian intelligence assessed, you know, this was an insider operation.
Speaker 1: This was not necessarily the Chinese government going to Huawei
Speaker 1: and asking permission, but that this was an infiltration of
Speaker 1: Huawei's service technicians by Chinese intelligence. In twenty twelve, and
Speaker 1: twenty thirteen. What Denmark decided to do was they said,
Speaker 1: we like what Huawei's talking about. We want to go
Speaker 1: with Huawei equipment, but we're going to subject the equipment
Speaker 1: to a very rigorous review. In the UK with the
Speaker 1: British Signals Intelligence had set up a special testing lab
Speaker 1: with Huawei to look for back doors or secret pathways
Speaker 1: into a product that would otherwise be undetectable. It was
Speaker 1: not a bad solution and it was an interesting compromise
Speaker 1: that we don't have many other examples of. China has
Speaker 1: consistently denied using Huawei for any intelligence collection or cyber
Speaker 1: attacks or things like that. Every country says that the
Speaker 1: information that we had, of course was very strong, including
Speaker 1: on the record comments from former senior US officials describing
Speaker 1: this breach, describing the intelligence and really describing for the
Speaker 1: first time the origin, if you will, of Western concerns
Speaker 1: about Huawei. But Denmark had a more nuanced view of this.
Speaker 1: They said, just as China could use Huawei to spy
Speaker 1: on Denmark, so too could the US with any of
Speaker 1: its allied countries products as well. So Denmark was equally
Speaker 1: suspicious about US approved products as it was China.
Speaker 3: Approved products, and there was a reason for that. Around
Speaker 3: the time our story takes place, Denmark was going through
Speaker 3: a kind of painful reckoning with its own intelligence and
Speaker 3: services and its relationship with the American NSA, and it
Speaker 3: was revealed that Denmark had basically allowed the NSA American
Speaker 3: signals intelligence to tap into these cables that transit the
Speaker 3: country to spy on the leaders of allies of ours,
Speaker 3: including Germany and Sweden and others. And so there was
Speaker 3: good reason for Danish government officials to take with a
Speaker 3: grain of salt this idea that China is the only
Speaker 3: country that would you use a friendly tech company and
Speaker 3: pair it with their intelligence apparatus.
Speaker 1: To piggyback on that. I mean, Denmark was closer to
Speaker 1: some of these highly sensitive intelligence operations than many countries are.
Speaker 1: So Denmark knew all too well. You know what the
Speaker 1: US is capable of, and what any country is capable
Speaker 1: of if they have access to the telecommunications equipment and
Speaker 1: the people who run it. So when Drake and I
Speaker 1: were reporting this and visiting, you know, Copenhagen and talking
Speaker 1: to people, what we found was this very firm belief
Speaker 1: among senior Danish government officials that they weren't going to
Speaker 1: take sides in this Huawei battle. I mean, despite the
Speaker 1: fact that Denmark is obviously a very close Western ally
Speaker 1: it's a part of NATO and part of the U.
Speaker 1: On this matter, you know, Denmark was not going to
Speaker 1: just roll over to the US demands and they were
Speaker 1: going to have a bake off and they were really
Speaker 1: going to see who's who's going to win this, Ericsson
Speaker 1: from Sweden or Huawei from China.
Speaker 3: You know. The other thing is that Huawei's equipment is
Speaker 3: good gear, you know, and it's cheap, So I think
Speaker 3: if you're setting all this stuff aside, it's like a
Speaker 3: good choice. You've got these sort of political considerations on
Speaker 3: both sides, and then you know you have this Danish
Speaker 3: company TDC trying to kind of decide on the merits
Speaker 3: as well.
Speaker 1: Twenty years ago, Wawei's equipment was seen as knockoff, low quality,
Speaker 1: obviously low costs as well. But a lot has changed
Speaker 1: in the last two decades and Huawei's equipment is state
Speaker 1: of the art. They have very very good customer service.
Speaker 1: Huawei will ship as many people to your country into
Speaker 1: your facility as you need to solve whatever problem you
Speaker 1: need solved. And there were many people inside TDC, Denmark's
Speaker 1: biggest telecom that were very happy with wahweih and had
Speaker 1: been for many years.
Speaker 2: And Drake, maybe you could tell us why upgrading from
Speaker 2: four G to five G is such a big undertaking
Speaker 2: and why getting this choice right mattered so much.
Speaker 3: So this was a big deal for some reasons that
Speaker 3: were technological and some reasons that were sort of political.
Speaker 3: As Jordan mentioned, Denmark was one of the first European
Speaker 3: countries to make this upgrade to five G. The promise
Speaker 3: of five G is really that it's going to be faster,
Speaker 3: more reliable. There's not going to be really any delay
Speaker 3: at all. You can put a lot more devices on
Speaker 3: the network, there's a lot more bandwidth. The bottom line
Speaker 3: is just that it's going to be a real step
Speaker 3: change from what we have now and in ways that'll
Speaker 3: kind of allow different kinds of devices to be on
Speaker 3: the cellular network.
Speaker 2: Here we have what Jordan describes as this bakeoff between
Speaker 2: ericson the kind of hometown favorite and Huawei to get
Speaker 2: this five G contract and so what happens from there.
Speaker 3: So the negotiations stretch through the winter of twenty eighteen
Speaker 3: twenty nineteen, and then we come to the end of
Speaker 3: the process, with sort of the bidder end of this process.
Speaker 3: Both sides have put in what's supposed to be their
Speaker 3: best and final offers. This information is very highly sensitive
Speaker 3: at TDC, the Danish Telecom. A couple weeks after both
Speaker 3: sides have submitted their best and final offers, Huawei suddenly,
Speaker 3: in the wee hours of the morning, turns in a
Speaker 3: revised bid. And that's a little weird in and of itself.
Speaker 3: But the thing that's really weird about it, and very
Speaker 3: suggestive is that while Huawei's earlier bid was higher than Erickson's,
Speaker 3: the new one is just under Ericson's bid, so just
Speaker 3: enough to be the winner. And that day, the Huawei
Speaker 3: country manager, a man named Jason Lan, whose job it
Speaker 3: is to get this contract and who has used the
Speaker 3: sort of ample resources of Huawei to try to whine
Speaker 3: and dine his way to get it, he asks for
Speaker 3: a meeting with a senior executive at TDC, the Danish Telecom.
Speaker 3: The two get to the meeting and Lan, who normally
Speaker 3: is this kind of solicitous guy, Land seemed like a
Speaker 3: totally different person, has this extremely uncharacteristic swagger, while the
Speaker 3: TDC executive, a guy named Jens Alos, doesn't sort of
Speaker 3: say specifically what it is that Land says. According to
Speaker 3: a statement Alos gave to his security team, this is
Speaker 3: extremely alarming to Alos, who basically cuts the meeting short
Speaker 3: after just a few minutes and goes back to the
Speaker 3: office and launches an investigation. So how did this information
Speaker 3: that's supposed to be some of the most protected information
Speaker 3: in the company get out to kind of like the
Speaker 3: last people in the world who should have known it.
Speaker 2: After the break, TDC goes looking for a possible leaker
Speaker 2: inside their operation Jordan. Right before the break, we heard
Speaker 2: how these Danish executives found out that Huawei may have
Speaker 2: gotten information about their competitors' bid and they launched this investigation.
Speaker 2: What did they do? How'd they go about trying to
Speaker 2: find a suspected leaker?
Speaker 1: So the first thing that TDC did was they homed
Speaker 1: in on the actual ericson bid document. This was a
Speaker 1: set of documents that existed on TDC's network but was
Speaker 1: very closely protected. It was a restricted access list. Only
Speaker 1: about a dozen people had authorized access to it. And
Speaker 1: at first they don't necessarily assume it's a person or
Speaker 1: it could be a hacker. They don't know. All they
Speaker 1: know is that this information leaked. When you buy equipment
Speaker 1: from a company like Huawei or Ericson or anybody else,
Speaker 1: you don't just get the equipment, you get the people too,
Speaker 1: Like you get the service technicians essentially come and work
Speaker 1: on your campus to service and maintain this equipment. So
Speaker 1: one of the first things that you know, the TDC
Speaker 1: security team considered was was there a hack. Did one
Speaker 1: of these Huawei employees that you know walks freely throughout
Speaker 1: the TDC offices, did they install malware? Did they go
Speaker 1: into a room that they weren't supposed to, you know,
Speaker 1: was there an insider of that variety? And secondarily what
Speaker 1: they considered was did somebody who had legitimate access to
Speaker 1: this file did they intentionally leak it? So at the beginning,
Speaker 1: there were two parallel investigations, and that led to the
Speaker 1: security team asking for and receiving the executives' cell phones,
Speaker 1: their laptops, and what they were looking for was evidence
Speaker 1: of potential hack. Now they didn't find one.
Speaker 3: And while they're doing all this, while they're getting everyone's
Speaker 3: laptops and cell phones, they're trying to keep secret the
Speaker 3: fact that there is this investigation, what the investigation is for.
Speaker 3: So it's this very delicate operation. The security team at
Speaker 3: TDC who's carrying out the investigation works in this subterranean room.
Speaker 3: They're basically trying to investigate the leadership of the company
Speaker 3: that they work for without letting them know that that's
Speaker 3: what they're doing. Among other things, it kind of makes
Speaker 3: the folks on the security team, who are kind of
Speaker 3: paranoid guys to begin with. It's a lot of former
Speaker 3: intelligence officers, former cops. It makes them even more jumpy
Speaker 3: than usual.
Speaker 1: A hack would have been the easier breach to investigate.
Speaker 1: If there's a hack, you can identify the device that
Speaker 1: was compromised, you could identify the account that was compromised,
Speaker 1: and you can close those holes. What TDC's security team
Speaker 1: landed on, however, was the far worse option, which was
Speaker 1: there is a mole. There is a leaker inside this
Speaker 1: company who is intentionally sharing very secret information about Ericson's
Speaker 1: bid with Huawei to help Whahwei win this contract. The
Speaker 1: only people who had access to that information were some
Speaker 1: of the most senior executives at the company. So that
Speaker 1: is a very concerning prospect because the folks on this
Speaker 1: security team they didn't know who to trust.
Speaker 2: And Drake the security team went to great lengths to
Speaker 2: not only disguise the fact that they were doing this investigation,
Speaker 2: but to actually protect the equipment that they were using
Speaker 2: to try to find the suspected leaker.
Speaker 3: A lot of what the security team was doing was
Speaker 3: looking at this hardware for signs of infiltration, and so
Speaker 3: every night after they'd done that, they would box them
Speaker 3: up in these big, kind of rugged military style crates
Speaker 3: and then drive them to downtown Copenhagen and wheel them
Speaker 3: into this bank vault at Danska Bank so that they
Speaker 3: could be safe off the site of TDC's offices for
Speaker 3: the night. Despite all of these precautions they're taking, members
Speaker 3: of the team start to get the distinct impression that
Speaker 3: they also are being investigated or surveilled, and there's evidence
Speaker 3: that they were right. They discovered these microphones in the
Speaker 3: TDC boardroom that really weren't supposed to be there, and
Speaker 3: nobody could quite explain how they had gotten there.
Speaker 2: Who did they think was listening in on them?
Speaker 3: I mean, they never figured out who installed the microphones.
Speaker 3: The suspicion was that these were not folks inside TDC.
Speaker 3: This wasn't people at TDC trying to find out about
Speaker 3: the investigation. That's when they decided they needed to move
Speaker 3: the entire investigation off site. They decamped to this fifteenth
Speaker 3: floor room that's on the water and Copenhagen has got
Speaker 3: this very beautiful, dramatic location with views of the shore.
Speaker 2: But even after moving, they still had this feeling that
Speaker 2: they were being watched.
Speaker 3: Yeah, and this gets us to one of the kind
Speaker 3: of most eerie sort of occurrences in the story, which
Speaker 3: is that one night after the team has gone home,
Speaker 3: like twelve twenty am, there's a security guard who's making
Speaker 3: his rounds and he sees these bright lights and realizes
Speaker 3: that he's looking at a drone hundreds of feet up
Speaker 3: in the air, and as he watches, it kind of
Speaker 3: like maneuvers around for several minutes and then descends kind
Speaker 3: of out of sight to the ground.
Speaker 2: And it's hovering right outside the window of the investigator's office.
Speaker 3: That's right exactly. And the investigators and they get to
Speaker 3: work the next day and sort of learn this story,
Speaker 3: realize that they've left the blinds open in this window
Speaker 3: and there's actually this giant whiteboard as part of the
Speaker 3: documents that we base this on, like a photo of it,
Speaker 3: where they've kind of laid out this giant chart of
Speaker 3: connections everything they're looking at in their investigation.
Speaker 2: So if the drone had a camera, they fear that
Speaker 2: it could have been photographed.
Speaker 3: Yeah, I mean, the idea is that this would have
Speaker 3: been visible to that drone.
Speaker 1: Yeah, it wasn't just a drone. The security team also
Speaker 1: starts to believe that it too, is being followed. You know,
Speaker 1: some members of that security team begin to see the
Speaker 1: same people pop up around town. In one case, one
Speaker 1: of the members of the security team saw a woman
Speaker 1: in a bar who appeared to be taking photos of him.
Speaker 1: When he confronted her, she hurried away. When he and
Speaker 1: his group sat back down again at the bar, a
Speaker 1: different woman enters the bar and appeared to be listening
Speaker 1: to their conversation. The security team could never prove that
Speaker 1: these events were related, but they had the strong suspicion
Speaker 1: that they were. Whether it was the drone, whether it
Speaker 1: was the women in the bar, this was a series
Speaker 1: of events that just really kind of culminated in this
Speaker 1: growing fear and suspicion that this investigation had a lot
Speaker 1: more elements to it than they had originally been aware.
Speaker 2: So Jordan. Eventually, the security team starts to make headway
Speaker 2: looking through all the records, all the different devices, and
Speaker 2: they think they found the potential person who was leaking
Speaker 2: this information.
Speaker 1: They home in on a suspect. You know, one of
Speaker 1: the other big characters in this story is a guy
Speaker 1: named Dove Goldstein. Dove Goldstein had worked at TDC for
Speaker 1: many years. He had risen through the ranks. He worked
Speaker 1: in the finance department, and he worked on big project
Speaker 1: He worked on special projects. He worked on the contracts
Speaker 1: for these big network infrastructure upgrades. He was considered a
Speaker 1: trusted executive reporting to the chief financial officer. There had
Speaker 1: been suspicions raised about this person because he was asking questions,
Speaker 1: he was on their radar screen, But it wasn't until
Speaker 1: they actually got to look at his laptop that they
Speaker 1: were able to piece together. Oh, here's what happened, And
Speaker 1: the way Dove Goldstein enters this story is that when
Speaker 1: the security team began looking at his history, in his calendar,
Speaker 1: in his text messages, in his emails, what they saw
Speaker 1: was a very deep and growing relationship with Jason Land,
Speaker 1: Huawei's country manager for Denmark, and the communications that TDC's
Speaker 1: security team unearthed really showed a very clear pattern around
Speaker 1: when the negotiations were heating up and while he was
Speaker 1: getting ready to either make a big presentation to TDC
Speaker 1: or submit like a preliminary bid, the communications between Jason
Speaker 1: and Dove heated up as well. They would meet for
Speaker 1: lengthy dinners. In one case, there was a four and
Speaker 1: a half hour dinner at a very expensive restaurant in
Speaker 1: central Copenhagen, so there was a relationship there. What TDC
Speaker 1: security team found in analyzing Dove Goldstein's laptop was Dove
Speaker 1: Goldstein opened some files on his computer that he wasn't
Speaker 1: supposed to have. This included Erickson's bid. He sets a
Speaker 1: meeting with Jason Land, he goes to that meeting, he
Speaker 1: brings the laptop with that information that he had just
Speaker 1: opened to that meeting, and he is recorded on CCTV
Speaker 1: the building CCTV system leaving for the meeting, returning from
Speaker 1: the meeting with this Lenovo laptop under his arm.
Speaker 2: So he wasn't supposed to have that detailed information about
Speaker 2: Ericson's bid. How did he get it?
Speaker 1: What the security team found was that Dove Goldstein had
Speaker 1: received this information from his boss, the company's chief financial officer,
Speaker 1: a guy named Steve Postwa. This information was easier for
Speaker 1: him to get because he was in many of these meetings.
Speaker 1: He was not on the five G committee that ultimately
Speaker 1: made the decision, but he was the company's CFO. Our
Speaker 1: reporting found that while TDC's security team found evidence that
Speaker 1: the CFO had shared the information with his subordinate, they
Speaker 1: did not find evidence that he knew that that information
Speaker 1: had then subsequently been shared. Nevertheless, this was considered the
Speaker 1: smoking gun.
Speaker 2: And Drake, why would Gov Goldstein's boss share that information
Speaker 2: with him?
Speaker 3: Yeah, I mean that's a great question. We don't know.
Speaker 2: So Drake, what happened then when it was discovered that
Speaker 2: Huawei had received this information?
Speaker 3: So TDC decides pretty quickly in their investigation that they
Speaker 3: can't do business with Huawei after what they've learned, and
Speaker 3: communicate this to Huawei in kind of provisional way and
Speaker 3: then do it in an official way. At this breakfast
Speaker 3: meeting where Jason Land is there. Other Huawei executives have
Speaker 3: flown in to be there. From the sound of it
Speaker 3: was a pretty intense meeting. According to you know, a
Speaker 3: statement that TDC executive made to the security team after
Speaker 3: the fact, there were these kind of veiled threats of
Speaker 3: the difficulties that Danish companies would have in China should
Speaker 3: the deal go against Huawei, But TDC sticks with its
Speaker 3: decision to go with Erickson.
Speaker 2: Jordan, how do you and Drake know all of these details?
Speaker 2: You have a lot of information about secret meetings and
Speaker 2: the inner workings of a security team that's doing an
Speaker 2: internal investigation. How were you able to find all of
Speaker 2: this out?
Speaker 1: So, Drake and I, you know, not only spoke with
Speaker 1: about a half dozen people who were either involved with
Speaker 1: or briefed about the findings of this investigation, but we
Speaker 1: were also able to review extensive internal documentation from TDC
Speaker 1: describing the investigation and its conclusions, you know, And this
Speaker 1: included investigator's notes, This included reports that were prepared for
Speaker 1: briefings to the board and to TDC's CEO and other executives.
Speaker 1: A lot of our reporting comes from those documents, you know,
Speaker 1: and the interviews with those people involved with or briefed
Speaker 1: about the investigation.
Speaker 2: And Drake, what did TDC say about your reporting?
Speaker 3: TDC didn't respond in detail to the very detailed questions
Speaker 3: we sent over to them. They did send us a
Speaker 3: statement that read, we recognize some of the things in
Speaker 3: Bloomberg's findings from our own files. We conducted a broad
Speaker 3: and deep investigation, and all appropriate measures were taken Accordingly.
Speaker 3: None of the employees directly mentioned by Bloomberg work for
Speaker 3: the company today and Jordan.
Speaker 2: That raises the question what happened to Dove Goldstein and
Speaker 2: to his boss, the chief financial officer of TDC.
Speaker 1: Shortly after the security team submitted its findings to the
Speaker 1: executive you know staff at TDC. Dove Goldstein's boss, Steve Postwor,
Speaker 1: the chief financial officer, he left the company. TDC announced
Speaker 1: his departure in March of that year, just a few
Speaker 1: weeks after you know, a lot of this was happening.
Speaker 1: They did not provide a reason for his departure. Dove
Speaker 1: Goldstein left a short time after. We reached both men separately,
Speaker 1: and they both declined to comment for the story.
Speaker 2: And what about Huawei? What do they have to say
Speaker 2: about this?
Speaker 1: We sent haweih very detailed statements of our findings. They
Speaker 1: declined to address specific questions, but issued us a statement
Speaker 1: saying that Huawei complies with applicable laws and regulations and
Speaker 1: strives for the highest standards of business conduct. We deny
Speaker 1: any wrongdoing. Jason Land, who is still a Huawei employee,
Speaker 1: issued us a statement through a personal attorney. Land quote
Speaker 1: believes that he has acted in compliance with all applicable
Speaker 1: laws and regulations at all times. Land's lawyer describes Land's
Speaker 1: relationship with Goldstein as quote of a professional nature and
Speaker 1: one that was appropriate in the circumstances. Our reporting shows
Speaker 1: he continues to work for them this day.
Speaker 2: When we come back, Huawei turns its attention to winning
Speaker 2: five G contracts across the globe.
Speaker 3: Drake.
Speaker 2: So what's happened since with Huawei they're still trying to
Speaker 2: pursue these contracts in other countries? How is that going well?
Speaker 3: I think the moment that we're writing about here marks
Speaker 3: a kind of high water mark for Huawei. Before they
Speaker 3: really were winning a lot of contracts, taking business away
Speaker 3: from their competitors in all over the world, and afterward
Speaker 3: that's changed. It's more that this is indicative of a
Speaker 3: certain kind of behavior that I think has alarmed business
Speaker 3: leaders and government officials in all sorts of countries for
Speaker 3: some time now, and so in the years since, you've
Speaker 3: seen Huawei lose deals kind of all over the place,
Speaker 3: and you've actually seen governments in Europe and elsewhere put
Speaker 3: in place policies where Huawei gear cannot be used in
Speaker 3: their telecom infrastructure, especially in sensitive parts of it, and
Speaker 3: in some instances has to be taken out.
Speaker 2: And is that in direct response to this sort of
Speaker 2: pressure from the US that were describing earlier to discourage
Speaker 2: the use of Huawei equipment.
Speaker 1: Part of it is that the US has put extraordinary
Speaker 1: pressure on its allies to not use Huawei equipment, especially
Speaker 1: for five G, which is a special type of technology
Speaker 1: that requires lots and lots of maintenance by the equipment vendors.
Speaker 1: So like you don't just get Huawei equipment, you get
Speaker 1: their people as well. So the US has put amazing
Speaker 1: amount of pressure on its allies to not use WAWEH
Speaker 1: and that's had an effect with five G in North
Speaker 1: America and Western Europe. However, if you look around the world,
Speaker 1: Huawei still has close to a third of the market
Speaker 1: total market share worldwide for telecommunications infrastructure equipment, right, and
Speaker 1: if you look at a map of the world, you
Speaker 1: see Asia, you see Russia, you see Latin America, you
Speaker 1: see Africa, right like you see giant parts of the
Speaker 1: globe that are firmly in Huawei's corner, and where Huawei
Speaker 1: did get five G deals, where Huawei still has a
Speaker 1: really commanding presence. So Ericson and Nokia, for all of
Speaker 1: their successes in Western Europe and North America, with five G,
Speaker 1: they're far from the lead. And there's no indication that
Speaker 1: these you know, these two Nordic companies will be able
Speaker 1: to catch up Tohuawei anytime soon despite some of these setbacks.
Speaker 2: Jordan, What are we supposed to make of this? This
Speaker 2: was one five G deal, a fairly small one in
Speaker 2: one country, and yet obviously has had big repercussions. What
Speaker 2: does this say about these larger forces between the US
Speaker 2: and China and West versus East.
Speaker 1: This deal was in many ways a proxy fight between
Speaker 1: the US and China or the future of you know, technology,
Speaker 1: dominance and technology kind of control. This very small country
Speaker 1: got caught in the middle.
Speaker 3: You know.
Speaker 1: One way to think about this is that this was
Speaker 1: like round one. This was over five G. There will
Speaker 1: be other generations of telecommunications technology and what the Denmark
Speaker 1: incident showed is that a lot of these countries don't
Speaker 1: want to be bullied around by the US like they
Speaker 1: want to be independent, they want to maintain that independence.
Speaker 1: One thing that is clear is that even though the
Speaker 1: US was successful throughout North America and Western Europe in
Speaker 1: dampening interest in Huawei's technology, that doesn't mean Huawei is dead.
Speaker 1: Far from it. Hahwei still has a commanding lead in
Speaker 1: telecommunications infrastructure around the world, and there will be another
Speaker 1: infrastructure bidding in a few years and another after that.
Speaker 1: This will not be the last time that we've heard
Speaker 1: of this kind of proxy fight between the US and
Speaker 1: China over telecommunications infrastructure.
Speaker 2: Jordan Drake, thanks so much for coming on the show.
Speaker 2: Thanks Wes, Thanks for listening to us here at The
Speaker 2: Big Take. It's a daily podcast from Bloomberg and iHeartRadio.
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Speaker 2: Vicky Bergalina. Our senior producer is Catherine Fink. Our producers
Speaker 2: are Moe Barrow and Michael Falero. Hilde Garcia is our engineer.
Speaker 2: Our original music was composed by Leo Sidrin. I'm West Kesova.
Speaker 2: We'll be back tomorrow with another big take.