Brazil Is Weighing 5G Risks Amid U.S-China Spat Over Huawei

Julia Leite and Samy Adghirni, Bloomberg News

A Swisscom AG network mast, equipped with 5G apparatus, stands on a roof of a Swisscom building in Bern, Switzerland, on Thursday, July 4, 2019. Nokia and Ericsson—fierce rivals themselves—have recently wrested notable long-term deals from Huawei to build 5G wireless networks, to enable everything from autonomous cars to robot surgery. , Bloomberg

(Bloomberg) -- Brazil’s national security body is conducting a broad risk review before the country chooses a partner to build its ultra-fast fifth generation mobile network.

The head of the country’s Institutional Security Cabinet, General Augusto Heleno, said the government is aware of the U.S. allegations that Huawei Technologies Co. includes components that can be used for spying. The company is the largest provider of telecom gear in the world, and supplies technology equipment to all large telecom operators in Brazil.

Heleno said the government is gathering information, but he ruled out banning the Chinese company’s bid in next year’s auction, a move that would be “too radical” in what he expects will be a “good fight” for Brazil’s 5G network. Officials will likely make a decision sometime next year, according to Heleno.

“We can’t pretend we’re not watching,” he said in an interview in his cabinet in Brasilia. “The big threat in all this 5G discussion is about the fact that it will allow whoever owns the technology to know who you are, how much do you earn and what’s in your bank account.”

U.S. Pressure

U.S. officials have urged Brazil and other allies not to rely on Huawei components in their 5G networks, saying it would facilitate spying by Beijing. The U.S. State Department has warned that it could downgrade security cooperation with Brazil if it gives the Chinese technology company the go-ahead.

Read More: China Confident Huawei Will Build Brazil’s 5G Mobile Network

While President Jair Bolsonaro is a close ally of U.S. President Donald Trump, the Brazilian leader is increasingly warming up ties with China after criticizing Beijing earlier this year. China is Brazil’s top trading partner.

Bolsonaro has met with his Chinese counterpart Xi Jinping twice since October. Earlier this week, the Brazilian president spoke with Huawei’s Brazil’s CEO in Brasilia. After the meeting, Bolsonaro said his country will choose whoever has the best offer to build its 5G network.

“The whole world is getting acquainted with a new reality, which has its pros and cons,” Heleno said. “Excluding a specific company, a country or a technology -- there’s nothing to justify that, not for us or anyone else.”

--With assistance from Fabiola Moura.

To contact the reporters on this story: Julia Leite in Sao Paulo at jleite3@bloomberg.net;Samy Adghirni in Brasilia Newsroom at sadghirni@bloomberg.net

To contact the editors responsible for this story: Juan Pablo Spinetto at jspinetto@bloomberg.net, Matthew Malinowski