Huawei on a 5G roll in US ally Thailand

BANGKOK – While Huawei Technologies remains firmly on a United States cyber-security black list, its long-time ally Thailand is opening wide to the Chinese tech giant.

On December 19, Thai Prime Minister Prayut Chan-ocha presided over an inauguration event for the “Siriraj World Class 5G Smart Hospital”, which was likewise attended by Huawei Thailand chief executive officer Abel Deng, among others.     

The event also marked the launch of a Joint Innovation Lab between Bangkok’s Siriraj Hospital and Huawei to incubate innovative 5G medical applications. 5G, or fifth generation, refers to the latest telecommunications technology standard that began rolling out in 2019 and of which Huawei is a pioneer and market leader.

5G not only means faster communications and connections to electronic devices but also enables businesses to collect vast amounts of data for further use in digital platforms and application development as well as startup businesses, all key aspects of the modernized, digital economy Thailand is striving to create.

Siriraj Hospital happens to be the hospital in which the much-revered late Thai monarch King Bhumibol Adulyadej (Rama IX) spent his twilight years and was founded by his father, the Harvard-educated Prince Mahidol Adulyadej, remembered as the “father of modern medicine” in the kingdom.

Huawei’s establishment of close collaboration with such a royally connected institution represents a public relations coup and underscores the Chinese tech giant’s growing clout in Thailand’s economy, observers note.  

“It sends a very strong signal that Thailand is opening the door to Huawei, especially during a public health crisis,” said Benjamin Zawacki, senior program specialist for Southeast Asian Regional Security at The Asia Foundation in Thailand and author of the book “Thailand: Shifting Ground between US and Rising China.”

China has arguably scored more points from the Covid-19 pandemic in Thailand than the United States, which was perceived as slow to provide access to US-made vaccines – Pfizer and Moderna – while China was quick to deliver Sinovac and Sinopharm alternatives.

While both Chinese-made shots have been deemed less effective against the virus, especially the now fast-spreading Omicron variant, they were ostensibly on hand during the early days of the pandemic when the Thai government was under heavy criticism for botching the vaccine rollout. 

Huawei has been similarly astute in leveraging the pandemic to its advantage. As early as June 2020, Siriraj and Huawei had developed 5G technology applications to launch self-driving vehicles for “contactless” delivery of medical supplies to Covid cases in the hospital.

Since the Covid outbreak, Siriraj Hospital and Huawei have also piloted 5G portable medical boxes, 5G medical carts and 5G smart hospital beds and the two partners expect that 30 5G medical applications will be incubated and promoted nationwide in 2022.

Given its greater speed and enhanced data storage capacity, 5G is deemed particularly well suited to medical applications which require stable, uninterrupted telecommunication connections.

It is one of several huge potential markets for Huawei in Thailand, which is promoting itself as a regional medical and wellness hub for global travelers and patients.

“We will introduce 5G hospitals, 5G ambulances and AI-assisted solutions in 10 hospitals,” said Huawei management in written responses to Asia Times questions. That is the tip of the 5G iceberg.

“We will also build over three 5G city benchmarks to support the APEC (Asia-Pacific Economic Cooperation) Summit to be hosted in Thailand (in November) and in line with the EEC’s digital vision we will deploy ten 5G factories in the EEC, including a 5G automobile manufacturing factory,” said Huawei.

The Eastern Economic Corridor (EEC), comprising three provinces on Thailand’s eastern coastline adjacent to Bangkok, is a pivotal program for uplifting the economy and escaping the so-called middle-income trap by stimulating future growth through the promotion of high-tech industries, many of which will rely on 5G technology in such areas as automation, robotics and logistics.

The EEC is also the signature scheme of Prime Minister Prayut, who initially came to power via a coup in May 2014 and has soldiered on as a semi-elected leader appointed by the Senate following a 2019 general election.

 On November 25, 2021, Prayut held a “virtual meeting” with Huawei founder and CEO Ren Zhengfei to “deepen cooperation” with the Chinese tech giant.

“Huawei has provided profound contributions to Thailand’s fight against the pandemic and the country’s digital transformation,” Prayut said after the meeting with Ren.

Such high-level Thai praise for Huawei is a certain poke in the eye of the US, which continues to blacklist Huawei in its home market, first under the administration of the bombastic and unpredictable former president Donald Trump and now under the more subdued and polite President Joe Biden.

Trump pressed allies and partners not to use Huawei equipment in their 5G rollouts due to security concerns, but Biden’s policy towards Huawei has thus far not extended to US allies, analysts say.

Thai Prime Minister Prayut Chan-ocha, top right, participates in a video conference with Huawei Technologies managers including founder and CEO Ren Zhengfei, left, on November 25, 2021. Photo: Thai Government House

“The Trump administration lobbied countries to keep Huawei out of their 5G networks but I have not heard of Biden officials pressing countries like Thailand to exclude Huawei from their networks although they might, later,” said Murray Hiebert, a senior associate with the Center for Strategic International Studies (CSIS).

In November, Biden signed legislation to prevent foreign companies deemed security risks, including Huawei and China’s ZTE, from getting new licenses to buy equipment in the US used to develop 5G and other telecom technologies. Ironically, one of the key weaknesses of the US’s anti-Huawei policy abroad has been the absence of a US-made 5G alternative.  

“There is no US alternative, so what do we do?” asked Sihasak Phuangketkeow, a senior advisor to the EEC and a former permanent secretary at the Thai Foreign Ministry.

The Biden administration may be more open to this more realistic view of Huawei than Trump was, observers note.

“I think that the US would be a bit hard-pressed to levy some sort of sanctions, or punitive FDI (foreign direct investment) measures based on the purely negative set of arguments,” said Zawacki. “In that sense, I think there will be some encouragement to diversify, and maybe at some point there will be an American alternative, but I think for Thailand the ship has largely sailed.”

It has indeed, with Huawei clearly at the helm. Thailand held 5G spectrum license auctions in February 2020, making it the first country to introduce the telecommunications technology in Southeast Asia.

Thailand’s main mobile phone service providers – AIS, DTAC and TRUE – were the 5G license winners and are now actively promoting the service among their customers, a process that should take off quickly in 2022 when 5G-compatible handsets become more accessible at cheaper prices.

The three local servers are highly dependent on Huawei technology, although there have been efforts to diversify that dependence by using alternative 5G technology from European vendors Ericsson and Nokia.

“The main 5G network supplier-vendor is still Huawei in Thailand,” said Prasit Sujiravorakul, a telecommunications stock analyst at Bualuang Securities. “Mobile operators are trying to diversify from a heavy reliance in Huawei to Ericsson and Nokia recently due to the scandals involving Huawei, but regardless, I estimate that 60% of the mobile networks in Thailand still come from Huawei,” Prasit said.

Ericsson is clearly the Number 2 player in the Thai market, but that may change in the near future, some analysts suggest.

“The reason I am in Thailand now is because I need to change that,” said Igor Maurell, the recently appointed president of Ericsson Thailand who was previously vice president of Ericsson Southeast Asia, Oceania and India. “Thailand is a front-runner when it comes to 5G (in Southeast Asia), which makes it a very interesting market for us,” Maurell told Asia Times.

After slow starts in rolling out 3G and 4G telecommunications eco-systems, Thailand has arguably taken a lead in 5G, which is expected to dominate the telecom market within three to four years, partly thanks to Huawei.

“We are very proud to see that Thailand is now in the leading position on 5G development in the whole of ASEAN,” said Huawei in a response to questions.

“By the end of 2021 third quarter, Thailand had deployed 20,000 5G stations (Huawei worked with carriers and the government to deploy a large proportion of them), and reached 4.3 million 5G users, which is 2.5 times the total number of 5G users in other ASEAN countries.”

Bangkok was ranked among the top ten 5G cities by GSMA, a global organization of mobile ecosystem players. Ericsson still sees plenty of room for growth in Thailand, particularly in the “enterprise” segment of the market.

“Thailand is a manufacturing and industrial hub and most enterprises need to modernize their IT infrastructure,” said Maurell.

“So we see a huge potential from Japanese enterprises in Thailand. Japanese really want to work with companies that they consider secure and that’s where the European vendors have an edge. And if we look at Japan, Ericsson has a really strong footprint in Japan so all these things make Thailand and interesting market for us.”

Ericsson claims that it can provide a secure system for clients, even if the country’s mobile service network is deemed insecure. “We can create dedicated networks for our customers so that they don’t need to rely on the existing networks in the country and they have their own systems that can provide security,” Maurell said.

In that sense, the US’s sanctions on Huawei have proven good news for Ericsson, he acknowledged.    

There is also the EEC market for Ericsson and all 5G vendors, where the Thai government has been vigorously promoting the kind of industries that will need to rely on the new technology and will be predominantly export-oriented.

While Huawei has taken a lead in the EEC – last year it signed a MOU with the EEC Office to set up a Huawei Academy to train Thais in 5G technology and applications – that may be chiefly because Thai authorities could not afford to wait for other vendors to catch up with the Chinese tech giant.

“I think for the EEC it was basically a decision that we made because we wanted to develop the needed infrastructure as quickly as possible,” said Sihasak. “It is essential for the EEC to have the best 5G and the widest coverage, so I guess it was based on the economic rationale and it doesn’t mean that we are going in the direction of China,” said the former Thai diplomat.

Huawei 5G solutions are also considerably cheaper than their competitors, industry sources note. Of course, there are some lingering security concerns but these may be overshadowed by other considerations for Thailand.

“Maybe there are security concerns in the back of our minds, but unavoidably the Chinese economy looms large,” Sihasak said. “And the supply chains centered in China will remain crucial. The Chinese market will remain crucial. Investment from China will remain crucial. That’s the fact.”