LG U+ says it hasn’t been told to drop Huawei

LG U+, the only carrier in Korea that is openly using Huawei equipment to build its 5G infrastructure, said Thursday it has not been contacted in any way by the government or asked to stop using the Chinese equipment.

Some local reports published Thursday had quoted an anonymous official from the U.S. Department of State saying that the Korean government should not let LG U+ “offer services in sensitive areas in Korea.”

“We have no intention of dropping our original plan so far,” a spokesperson for LG U+ said in phone call with the Korea JoongAng Daily on Thursday. “Even if the conflict grows, we have secured enough equipment to complete our original goal of establishing [80,000 5G base stations within this year.]”

The spokesperson also said that if the “sensitive area” referred to in the story is talking about U.S. military bases, “We are not using Huawei devices there, not even for LTE. We have always used Ericsson equipment for that area.”

While LG U+ has chosen four network equipment providers - Samsung Electronics, Huawei, Ericsson, and Nokia - to establish its 5G infrastructure, Huawei equipment is estimated to be used in roughly 30 percent of the carrier’s 5G base stations.

The choice by the smallest carrier in the country to include Huawei was met with concerns late last year, but LG U+ has remained firm in its stance that using Huawei is okay.

At last year’s year-end press briefing, LG U+ CEO Ha Hyun-hwoi even came forward to say that the carrier does not think there are any security threats related to its use of Huawei equipment.

“Security concerns apply to every equipment vendor we partner with, not only Huawei, and we need to thoroughly verify all the equipment [we use] is secure,” Ha said. “There are roughly 170 countries that are already using Huawei’s network equipment and there hasn’t been any security problems reported so far.”

However, with the United States growing ever more aggressive with ousting Huawei equipment, not only in its own country but also in partnering countries, concerns are growing for other Korean mobile carriers as well.

Though SK Telecom and KT have not used Huawei equipment to build their 5G infrastructure, they have been using the company’s equipment on their landline networks, though both carriers said their use of the equipment on landline networks has nothing to do with the security threats raised today.

A spokesperson from SK Telecom said, “Huawei equipment is used in the least important part of our landline network infrastructure, unrelated to security concerns.”

A spokesperson from KT also said there is no “security threat involved in the landline network” and that the company has seen no problem while using Huawei for a very long time in its landline networks.

“As the Korean government has already said, selecting equipment partners is a decision to be made by a private company. And also considering diplomatic relations with China, it’s not likely [that LG U+] will unilaterally break its contract with Huawei,” Choi Nam-kon, a research fellow at Yuanta Securities wrote in a report Thursday.

“Also there are many customers of Huawei in a range of sectors like the Korea Electric Power Corporation, Koscom, Nonghyup and Hyundai Motor using Huawei’s telecommunications equipment as well.”

Shares of mobile carriers ended weak on the Korean stock market on Thursday. LG U+ dropped by 6.35 percent on Thursday to close at 14,000 won ($11.74). SK Telecom saw a 0.79 percent drop in shares to 251,000 won and KT fell 0.55 percent to 27,100 won.

BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]