35.71 +0.01 (0.03%)
Before hours: 5:14AM EDT
|Bid||0.00 x 1400|
|Ask||35.94 x 1400|
|Day's Range||35.49 - 35.72|
|52 Week Range||30.12 - 45.45|
|Beta (5Y Monthly)||0.62|
|PE Ratio (TTM)||8.21|
|Forward Dividend & Yield||2.22 (6.23%)|
|Ex-Dividend Date||May 21, 2020|
|1y Target Est||50.19|
The rollout of superfast 5G wireless service has lifted the stocks of its hardware providers, but not those of the wireless operators that will offer it. (0941) (ticker: CHL) and (0788)(CHWRF) are leading the world in 5G deployment, says a team of Bernstein analysts. As an operator, China Mobile will enjoy a more supportive pricing environment than most, while China Tower should see new revenue as it installs 5G antennas.
We know that hedge funds generate strong, risk-adjusted returns over the long run, which is why imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, professional investors have to conduct complex analyses, spend many resources and use tools that are not […]
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
China Mobile (CHL) has been upgraded to a Zacks Rank 1 (Strong Buy), reflecting growing optimism about the company's earnings prospects. This might drive the stock higher in the near term.
(Bloomberg) -- The U.S. Federal Communications Commission designated Huawei Technologies Co. and ZTE Corp. as national security threats, a step toward driving the Chinese manufacturers from the U.S. market where small rural carriers rely on their cheap network equipment.The action means money from federal subsidies used by many small rural carriers may no longer be used to buy or maintain equipment produced by the companies, the FCC said in a news release.“Both Huawei and ZTE have close ties to the Chinese Communist Party and China’s military apparatus,” FCC Chairman Ajit Pai said on Twitter. “We are sending a clear message: the U.S. government, and this @FCC in particular, cannot and will not allow the Chinese Communist Party to exploit vulnerabilities in U.S. communications networks.”The FCC has increasingly scrutinized Chinese companies as tensions grow between Beijing and Washington over trade, the coronavirus and security issues. The agency is considering banning three Chinese telephone companies, and last year barred China Mobile Ltd. from entering the U.S. market.The U.S. contends that Huawei’s equipment could be used by China for spying. The company has repeatedly denied that it poses any security risk, and insists that it’s independent of the Beijing government.“Barring U.S. operators from purchasing Huawei and ZTE equipment will not improve U.S. internet security, but will severely impact internet services, especially to rural and underdeveloped areas,” China’s Foreign Ministry spokesman Zhao Lijian said Wednesday. Huawei and ZTE declined to comment. Tuesday’s action formalizes a proposal the FCC adopted in November. The agency also proposed requiring carriers to remove gear from companies designated a threat -- a step that wasn’t finalized in Tuesday’s action.The designation means service will suffer as small carriers shut down parts of their network because they can’t use subsidy funds for maintenance or replacement parts, said Carri Bennet, general counsel of the Rural Wireless Association that represents carriers with fewer than 100,000 subscribers.“This is not good,” Bennet said in an interview. “They’re in a bind. They don’t have cash to keep the networks afloat.”About three dozen or four dozen rural carriers accept the subsidy and use equipment from Huawei or ZTE, the FCC estimated last year. It said the average cost for a firm to replace the equipment may range from $40 million to $45 million.FCC Commissioner Geoffrey Starks in a statement Tuesday said that “untrustworthy equipment” remains in place and called for the FCC to institute a replacement program. “There is much more to do,” he said.Pai on June 24 told Congress a full-scale rip-and-replace program could cost as much as $2 billion. The FCC wants to see “that needed funds are appropriated so we can move forward quickly to implement this program,” Pai said.Rural carriers had urged the FCC to delay action until Congress dedicates money to buying replacement gear.Rob Manfredo, a U.S.-based spokesman for Huawei, didn’t immediately respond to a request for comment.(Updates with Chinese government response in sixth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- The U.S. and China are moving beyond bellicose trade threats to exchanging regulatory punches that threaten a wide range of industries including technology, energy and air travel.The two countries have blacklisted each other’s companies, barred flights and expelled journalists. The unfolding skirmish is starting to make companies nervous the trading landscape could shift out from under them.“There are many industries where U.S. companies have made long-term bets on China’s future because the market is so promising and so big,” said Myron Brilliant, the U.S. Chamber of Commerce’s head of international affairs. Now, they’re “recognizing the risk.”China will look to avoid measures that could backfire, said Shi Yinhong, an adviser to the nation’s cabinet and a professor of international relations at Renmin University in Beijing. Any sanctions on U.S. companies would be a “last resort” because China “is in desperate need of foreign investment from rich countries for both economic and political reasons.”Nevertheless, pressure is only expected to intensify ahead of the U.S. elections in November, as President Donald Trump and presumptive Democratic nominee Joe Biden joust over who will take a tougher line on China.Trump has blamed China for covering up the coronavirus pandemic he has mocked as “Kung Flu,” accused Beijing of “illicit espionage to steal our industrial secrets” and threatened the U.S. could pursue a “complete decoupling” from the country. Biden, likewise, has described President Xi Jinping as a thug, labeled mass detention of Uighur Muslims as unconscionable and accused China of predatory trade practices.And on Capitol Hill, Republicans and Democrats have found rare unity in their opposition to China, with lawmakers eager to take action against Beijing for its handling of Covid-19, forced technology transfers, human rights abuses and its tightening grip on Hong Kong.“China is going to be a punching bag in the campaign,” said Capital Alpha Partners’ Byron Callan. “But China is a punching bag that can punch back.”China has repeatedly rejected U.S. accusations over its handling of the pandemic, Uighurs, Hong Kong and trade, and it has fired back at the Trump administration for undermining global cooperation and seeking to start a “new cold war.” Foreign Minister Wang Yi last month said China had no interest in replacing the U.S. as a hegemonic power, while adding that the U.S. should give up its “wishful thinking” of changing the country.Both sides have already taken a series of regulatory moves aimed at protecting market share.The U.S. is citing security concerns in blocking China Mobile Ltd., the world’s largest mobile operator, from entering the U.S. market. It’s culling Chinese-made drones from government fleets and discouraging the deployment of Chinese transformers on the power grid. The Trump administration has also tried to constrain the global reach of China’s Huawei Technologies Co., the world’s largest telecommunications equipment manufacturer.Meanwhile, China prevented U.S. airline flights into the country for more than two months and, after the U.S. imposed visa restrictions on Chinese journalists, it expelled American journalists. It has stepped up its scrutiny of U.S. companies, with China’s state news agency casting one probe as a warning to the White House. China also has long made it difficult for U.S. telecommunications companies to enter its market, requiring overseas operators to co-invest with local firms and requiring authorization by the central government.One of the most combustible flash points has been the Trump administration’s campaign to contain Huawei by seeking to limit the company’s business in the U.S. and push allies to shun its gear in their networks.The U.S. Federal Communications Commission moved to block devices made by Huawei and ZTE Corp. from being used in U.S. networks. And the Commerce Department has placed Huawei on blacklists aimed at preventing the Chinese company from using U.S. technology for the chips that power its network gear, including tech from suppliers Qualcomm Inc. and Broadcom Inc.After suppliers found work-arounds, Commerce in May tightened rules to bar any chipmaker using American equipment from selling to Huawei without U.S. approval. The step could constrain virtually the entire contract chipmaking industry, which uses equipment from U.S. vendors such as Applied Materials Inc., Lam Research Corp. and KLA Corp. in wafer fabrication plants.The curbs also threaten to cripple Huawei. Although the company can buy off-the-shelf or commodity mobile chips from a third party such as Samsung Electronics Co. or MediaTek Inc., going that route would force it to make costly compromises on performance in basic products.Huawei was on a list the Pentagon unveiled last week of companies it says are owned or controlled by China’s military, opening them to increased scrutiny. The Ministry of Foreign Affairs in Beijing accused the Trump administration of “violating the very market economy principle the U.S. champions.”“We are strongly opposed to this,” the foreign ministry said Sunday of the Pentagon’s designation. “China urges the U.S. to stop suppressing Chinese companies without reason and provide a fair, just and non-discriminatory environment for Chinese companies to operate normally in the U.S.”After the new restrictions, the editor of the Communist Party’s Global Times newspaper tweeted that China would retaliate using an “unreliable entities list” that it first threatened at the height of the trade war last year. Although China didn’t identify companies on the list, the Global Times has cited a source close to the Chinese government as saying U.S. bellwethers such as Apple Inc. and Qualcomm could be targeted.The fallout could extend to companies heavily reliant on Chinese supply chains, as well consumer-facing brands eager to expand sales in Asia. Boeing Co., which recorded $5.7 billion of revenue from China in 2019, and Tesla Inc., the biggest U.S. carmaker operating independently in China, are among companies most exposed if relations sour further.“We’re playing in a much wider field now,” said Jim Lucier, managing director of research firm Capital Alpha Partners. “We’re not simply talking about ‘you tariff me’ and ‘I tariff you.’ The playing field is virtually unlimited.”Planes and AutomobilesU.S. automakers have also been singed. In June, China fined Ford Motor Co.’s main joint venture in the country for antitrust violations, saying Changan Ford Automobile Co. had restricted retailers’ sale prices since 2013.Aviation has been another source of tension, as both countries squabble over access to their skies. China’s decision to limit U.S. airlines operations to those services scheduled as of March 12 hurt carriers such as United Airlines Holdings Inc., Delta Air Lines Inc, and American Airlines Group Inc. that had suspended passenger flights to and from China because of the coronavirus pandemic.The U.S. responded earlier this month by initially threatening to ban all flights from China, then relenting to allow two flights weekly once Chinese officials eased their restrictions. Now, in what appears to be a staged de-escalation, China gave U.S. passenger carriers permission to operate four weekly flights to the country and earlier this month, the Trump administration matched the move by also authorizing four flights from Chinese airlines.It’s happening outside of aviation too. Consider the U.S. government’s decision to seize a half-ton, Chinese-made electrical transformer when it arrived at an American port last year and divert the gear to a national lab instead of the Colorado substation where it was supposed to be deployed. That move -- and a May executive order from Trump authorizing the blockade of electric grid gear supplied by “foreign adversaries” of the U.S. in the name of national security -- have already sent shock waves through the power sector.The effect has been to dissuade American utilities from buying Chinese equipment to replace aging components in the nation’s electrical grid, said Jim Cai, the U.S. representative for Jiangsu Huapeng Transformer Co., the company whose delivery was seized. Although Cai said the firm has supplied parts to private utilities and government-run grid operators in the U.S. for nearly 15 years without security complaints, at least one American utility has since canceled a transformer award to the company, Cai said.Trump’s directive is tied to a broader effort to bring more manufacturing to the U.S. from China. “This is a part of the administration’s efforts to impair China’s supply chains into the United States,” said former White House adviser Mike McKenna.Escalating tensions could jeopardize the U.S. economic recovery as well as China’s trade commitment to buy $200 billion in American goods and services over the next two years. The country’s purchase of U.S. goods increased last month as the economy continued its recovery from the coronavirus shutdowns, but imports are still far behind the pace needed to meet the terms of the phase one trade deal, according to Bloomberg calculations based on data from China’s Customs Administration.U.S.-China struggles also may factor into the November presidential election. Former U.S. national security adviser John Bolton alleges in a new book that Trump asked Xi to help him win re-election by buying more farm products -- a claim the White House has dismissed as untrue.“I don’t expect one single blow to send this relationship in a tailspin,” the chamber’s Brilliant said. “Each side will calibrate their reactions in a way that will not tip the scales too far.”Take the recent spat over media access. After the U.S. designated five Chinese media companies as “foreign missions,” China revoked press credentials for three Wall Street Journal staff members over an article with a headline describing China as the “real sick man of Asia.”Then the Trump administration ordered Chinese state-owned news outlets to slash staff working in the U.S. Beijing responded in March by effectively expelling more than a dozen U.S. journalists working in China.Both the U.S. and China have ample opportunities to ratchet up regulatory pressure. A bill passed by the Senate last month could prompt the delisting of Chinese companies from U.S. stock exchanges if American officials aren’t allowed to review their financial audits.And last week, as the U.S. State Department imposed visa bans on Chinese Communist Party officials accused of infringing the freedom of Hong Kong citizens, a senior official made clear the move was just an opening salvo in a campaign to force Beijing to back off new restrictions on the city.China, similarly, can slow licensing decisions and regulatory approvals, launch investigations under its anti-monopoly law and squeeze financial firms that want to do business in the country. For instance, the country could rescind pledges to let U.S. financial firms take controlling stakes in Chinese investment banking joint ventures, according to a Cowen analyst.“China will not make any significant compromise and will retaliate whenever and wherever possible,” said Shi, the Renmin University professor.Companies are still lured to China and its massive local market -- and tensions with the U.S. don’t overcome the Asian superpower’s appeal. Just one-fifth of companies surveyed by the American Chamber of Commerce in China late last year said they had moved or were considering moving some operations outside of the country, part of a three-year downward trend.But the coronavirus pandemic has subsequently pushed more companies to reckon with the risks of relying too heavily on any single country for their supply chains, amid existing concerns about forced technology transfers, cost and rising tensions that could damp investment in China.China is no longer the lowest-cost manufacturer, and companies are more reluctant to invest there, said James Lewis, director of the Technology Policy Program at the Center for Strategic and International Studies in Washington.“Everyone would like to be in the China market -- everyone wants it to be like 2010 -- but things are changing.”(Updates with trade data in 28th paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- The Pentagon unveiled a list of companies it says are owned or controlled by China’s military, opening them to increased scrutiny in the latest spat between the world’s biggest economies.The 20 companies included Huawei Technologies Co. and Hangzhou Hikvision Digital Technology Co., as well as a number of state-run enterprises. In letters to lawmakers dated June 24, the Pentagon said it was providing a list of “Communist Chinese military companies operating in the United States,” which was first requested in the fiscal 1999 defense policy law.This list includes “entities owned by, controlled by, or affiliated with China’s government, military, or defense industry,” Pentagon spokesman Jonathan Hoffman said in a statement.“As the People’s Republic of China attempts to blur the lines between civil and military sectors, ‘knowing your supplier’ is critical,” Hoffman said. “We envision this list will be a useful tool for the U.S. government, companies, investors, academic institutions, and like-minded partners to conduct due diligence with regard to partnerships with these entities, particularly as the list grows.”While the move may be largely symbolic since it doesn’t confer new authorities on the president, it comes as relations between the two superpowers continue to deteriorate, and as China has emerged as a key foreign policy issue in the U.S. election campaign. The U.S. has threatened sanctions against China for its treatment of Muslim minorities and increased grip over Hong Kong, while Beijing has for the past year threated to produce its own blacklist of U.S. companies.The U.S. list of companies said to be affiliated with the Peoples Liberation Army was mandated under the Defense Authorization Act of 1999, but no administration ever put out the required report. Trump has the authority under the International Emergency Economics Powers Act of 1977 to level financial sanctions against those companies.‘Baseless’China’s foreign and defense ministries, as well as the State-owned Assets Supervision and Administration Commission, which oversees China’s government-run companies, didn’t immediately reply to a fax during a public holiday in the country. Huawei, which already faces a number of restrictions from the U.S. government, also didn’t immediately reply to a request for comment.Hikvision called the U.S. move “baseless,” saying its ownership details have always been publicly available as a listed company and “independently operated enterprise.” It said it would continue to work with the U.S. government “to answer questions and correct misunderstandings about the company.” The company was among a number of Chinese entities put on a blacklist last year by the Trump administration.“Hikvision strongly opposes the decision by the U.S. government to misapply a never-used provision of a 21-year-old law,” a company spokesperson said. “Not only is Hikvision not a ‘Chinese military company,’ Hikvision has never participated in any R&D work for military applications.”China has long pursued a policy known as ‘civil-military integration’ that allows enterprises from both sectors to share dual-use technologies. In some cases, the policy allows the Chinese military to access technologies that might otherwise be difficult to obtain under sanctions imposed after the 1989 Tiananmen Square massacre.“The list put out today by the Pentagon is a start but woefully inadequate to warn the American people about the state-owned and -directed companies that support the Chinese government and Communist Party’s activities threatening U.S. economic and national security,” Republican Senator Marco Rubio said in a statement.China hawks in Congress have long pushed him to direct his Treasury Secretary Steven Mnuchin to deploy sanctions against Huawei. It’s unclear, however, whether the president would be willing to take such aggressive action against some of China’s most prized business champions in an election year, as the Beijing government would likely retaliate against American companies.‘Long Overdue’Derek Scissors, a China expert at the conservative American Enterprise Institute, said it was “long overdue for the government to indicate which Chinese firms have tight links to the PLA. But if there’s no meaningful action coming with that, it would just be posturing, possibly in reaction to the Bolton book.”In his memoir, which on sale Tuesday, former National Security Advisor John Bolton asserted that Trump asked Xi Jinping, China’s leader, to bolster purchases of American agricultural products to help him win re-election in November. Trump has rejected that claim.Some of the other major companies on the list include:Aviation Industry Corporation of China: Known AVIC, this state-owned company makes military and civil aircraft, and also provides plane components to Airbus SE and Boeing Co. China Aerospace Science and Technology Corporation and China Aerospace Science and Industry Corporation: These are state-owned companies that manufacture military components as well as satellites and unmanned aerial vehicles.China Railway Construction Corporation: This is a state-owned company that’s involved in construction of infrastructure projects such as railroads, tunnels and port terminals.China Telecommunications Corp.: This company owns Hong Kong-listed China Telecom Corp., the country’s No. 2 phone company, with $54 billion in revenue last year. The Federal Communications Commission is reviewing the license for China Telecom’s U.S. unit, saying the company’s links to the government pose a national security risk. State-owned China Telecom’s lawyers responded earlier this month with a letter saying the company obeys all U.S. laws and does not present a security risk.China Mobile Communications Group Co.: It owns China’s biggest mobile phone operator, with more than 940 million subscriptions. The FCC denied the U.S. arm of Hong Kong-listed China Mobile Ltd. a license for the U.S. last year, saying that granting the application “would raise substantial and serious national security and law enforcement risks.”Here is the full list: Aviation Industry Corporation of China; China Aerospace Science and Technology Corporation; China Aerospace Science and Industry Corporation; China Electronics Technology Group Corporation; China South Industries Group Corporation; China Shipbuilding Industry Corporation; China State Shipbuilding Corporation; China North Industries Group Corporation; Huawei Technologies Co.; Hangzhou Hikvision Digital Technology Co.; Inspur Group; Aero Engine Corporation of China; China Railway Construction Corporation; CRRC Corp.; Panda Electronics Group; Dawning Information Industry Co.; China Mobile Communications Group; China General Nuclear Power Corp.; China National Nuclear Power Corp.; China Telecommunications Corp.(Updates with detail throughout)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Chinese companies including Huawei Technologies Inc., China Mobile Communications Group and Hikvision Visual Technology Co. could face U.S. sanctions after a finding by the Trump administration that they are owned or controlled by China's military, Reuters reported Wednesday. The Defense Department has found 20 Chinese companies that operate in the U.S. are backed by the military, Reuters reported, citing an internal document. While the findings themselves do not trigger sanctions, President Donald Trump has the authority to sanction companies on the list, Reuters said. The list will likely add to tensions between China and the U.S., which has already blacklisted Huawei over national-security concerns.
The Trump administration has determined that top Chinese firms, including telecoms equipment giant Huawei Technologies and video surveillance company Hikvision, are owned or controlled by the Chinese military, laying the groundwork for new U.S. financial sanctions, according to a document seen by Reuters on Wednesday. A U.S. defense official speaking on condition of anonymity confirmed the authenticity of the document and said it had been sent to Congress. Washington placed Huawei on a trade blacklist last year over national security concerns and has led an international campaign to convince allies to exclude it from their 5G networks.
The novel coronavirus has left markets reeling and uncertain, with jobless claims in the tens of millions in the U.S. and a second wave of infections on its way. Given all this turmoil, investors may be reasonably shy about a hot new initial public offering (IPO). But the "multi-dimensional" Remark Holdings (NASDAQ:MARK) stock may be well worth considering precisely because the pandemic has caused such disruption.Source: Shutterstock Remark offers products that will help in the crisis and the company owns a stake in Sharecare, the medical startup co-founded by celebrity doctor Mehmet Oz and backed by Oprah Winfrey and Sony (NYSE:SNE).Zacks has given Remark, based in Las Vegas, a "strong-buy" recommendation. Remark's stock is set to open lower, giving smaller investors the opportunity to benefit from an IPO, which could be announced in the next few months, according to John Gilliam at Seeking Alpha.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThere are some reasons for caution, but in all, MARK looks like a very strong opportunity given the incredibly useful technology it produces. MARK Stock: Remark Scanning and Imaging Products for CompaniesRemark's innovative products include thermal imaging and scanning solutions that are already in use in Nevada. This artificial intelligence-driven tech can "scan high traffic areas to detect individuals with higher than acceptable skin temperature," the Wall Street Journal reports. * 10 Robotics Stocks on the Technological Cutting Edge Remark claims its products can be used with minimal training and scans for thermal irregularities in crowds faster than competing products by finding the "most accurate part on the face to take the temperature." The feature enables one employee to quickly check a large number of customers or workers.Moreover, the scanning device can detect compliance with PPE and social distancing rules and check clearances for certain work areas, possibly eliminating some individual security measures and reducing person-to-person contact.These devices have already seen "very strong demand," according to Remark CEO Kai-Shing Tao, who reports that the firm is "closing on average one or two a week" with companies anticipating full reopening in the coming weeks and months. Remark Products for RetailIn addition to its highly in-demand and much-needed solutions for the coronavirus, Remark has made a deal with China Mobile (NYSE:CHL) to provide all of its 17,800 stores with AI technology enabling "facial-ID, traffic counting, and smart queue management."This data will allow the company to streamline and optimize traffic flow in its stores by giving customers information about the nearest stores and number of customers in each one, and it allows them to get in line for a customer service agent before they arrive, via an online ticketing system.Such technology can significantly improve customer service, making for happier customers and a more successful brand. Additionally, by reducing foot traffic, these solutions can slow the spread of coronavirus and help companies operate smoothly with reduced physical capacity in stores. Some Reservations, But Remark Is Worth a LookRemark's health technology is entering a crowded field, with several companies producing similar products. While the company seems to have an advantage, having already put its devices successfully to use in its home market, some investors may wish to wait and see how Remark's solutions perform against competitors.Additionally, InvestorPlace notes, the company's CEO "appears to have no prior executive experience at a major technology company." Tao's previous positions were as chairman and CEO of Pacific Star Capital Management, founded in 2003, and as a partner at FALA Capital Group, a "single-family investment office." The Remark website lists no other company executives.Serving on the Remark board, however, are some high-profile names, including Theodore Botts, former executive at UBS (NYSE:UBS) and Goldman Sachs (NYSE:GS) and Dr. Elizabeth Xu, former CTO of BMO Software. Remark's celebrity endorsements and timely products may well give investors confidence, and overall, it seems like Remark Holdings stock may be a risk worth taking.As of this writing, Jody Bennett did not hold a position in any of the aforementioned securities. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * Top Stock Picker Reveals His Next 1,000% Winner * The 1 Stock All Retirees Must Own * Look What America's Richest Family Is Investing in Now The post Remark Has the Tech to Combat Covid-19, But Is It a Buy? appeared first on InvestorPlace.
(Bloomberg) -- Fifth-generation networking hype has been in full force since Qualcomm Inc. declared “5G is here, and it’s time to celebrate” in February of last year. The reality, however, has required patience from consumers due to the time needed to roll out the new networks and the dearth of applications to put additional speed to compelling use.A year after South Korea launched the world’s first full commercial 5G network and months after China opened the world’s biggest, Bloomberg News reporters tested the leading carriers in both countries to see how far 5G has gotten. Tests in Hong Kong and Tokyo showed similar results -- gaps in coverage that could leave most early adopters waiting for networks to reach full speed.Smartphone makers have swept in with a flood of 5G devices this year, with Samsung Electronics Co., Huawei Technologies Co. and Xiaomi Corp. all pushing the new technology without asking for much higher prices or design compromises. Millions of 5G phones have already been sold, and for the billions of people not yet on the bandwagon, the new wireless standard will soon be the default option anyway.Carriers aren’t moving quite as fast. They’re investing billions of dollars to set up and expand their 5G networks, but the technical design of this new standard demands high network density to provide the advertised stratospheric speeds. Once they have enough masts in place, they aim to recoup the initial costs by offering more bandwidth-hungry add-ons, such as Nvidia’s GeForce Now game-streaming service, which SoftBank Corp. launched in Japan on June 10.Where it’s available, even without hitting its max theoretical speeds, 5G is an impressive upgrade for most consumer applications. For example, at a gigabit per second (1Gbps), a user could download a 9-hour audiobook in less than 1 second, according to Fastmetrics, a U.S.-based internet service provider. Even at 1/10 of that speed, 100 megabits per second, a 45-minute TV show takes only 16 seconds, Fastmetrics estimates.Carriers in North America, Europe and Australia have also set up 5G, with so far underwhelming results for consumers. In March tests conducted by RootMetrics in the U.S., the choice appeared to be between fast speed with negligible availability -- Verizon Wireless Inc. recorded a max speed of 846Mbps with 3.1% availability in Chicago -- or wider availability without much of a speed bump -- T-Mobile US Inc. covered 57% of Washington but at a less impressive 148Mbps.While 5G uptake has been incremental, companies that make parts for the phones are betting on a wave of upgrades to drive smartphone demand and help spur economies from Taiwan to South Korea.Read more: 5G Report Card: T-Mobile Has Widest Coverage, Verizon Is FastestTo test download speeds and coverage, we sent four reporters out into Seoul, Beijing, Tokyo and Hong Kong with 5G phones and speed-measuring apps. Here’s what those tests showed:SeoulKT, the No. 2 South Korean carrier, has improved 5G service since the commercial debut in April 2019, though it still lacks the high-frequency airwaves necessary to reach top download speeds in the range of 20Gbps. SK Telecom Co., the country’s largest carrier, achieves a download speed of 1.5Gbps inside its headquarters, which drops to 1Gbps in the same building’s lobby.KT’s average 5G data speed ranges between 800Mbps to 1Gbps, the company said in an email. “It is hard to simply compare data speeds in South Korea, which has nationwide services, with other countries that only have test services or have services in a few cities,” the company said.BeijingIn Beijing, tests using a Huawei P40 Pro phone showed 5G service was consistent enough to play high-definition (1080p) video while riding in a car. There was no 5G signal inside the subway and the shopping mall in Guomao, where luxury brands from Tiffany to Vacheron Constantin are sold. Most of the Zhongnanhai district, home of the central government, has no 5G coverage, according to a map provided by China Mobile.A China Mobile representative in Beijing emailed a video showing download speed exceeding 1.1Gbps at Beijing Daxing International Airport. The representative had no further comment.Hong KongTests using a Huawei P40 Pro showed streaming of high-resolution 4K video was smooth outdoors even in a moving vehicle. The fastest download speed was recorded in the carrier’s flagship store in the city’s central business district.The carrier expects its 5G network to “penetrate deeply” in Hong Kong, Alex Cheng, China Mobile principal engineer, said in an email.TokyoAt two locations in the city, the 5G signal was strong inside the Docomo shop but became unstable a short distance away from it, using a Samsung Galaxy S20 phone and Netflix’s speed test app. Both of Tokyo’s main airports, two Olympics facilities and Tokyo Sky Tree are among the covered spots. Two more waves of 5G network expansion are planned by the end of July and end of October, the carrier said.“The initial rollout is going as planned,” Docomo said in an email.(Adds that anticipated 5G smartphone demand is driving chipmakers in seventh paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
A U.S. Senate report released Tuesday says the U.S. government failed to properly oversee Chinese-owned telecommunications companies for nearly two decades. The report from the Senate's Permanent Subcommittee on Investigations says the U.S. government "provided little-to-no oversight of Chinese state-owned telecommunications carriers operating in the United States for nearly twenty years." It faulted the Federal Communications Commission (FCC) and "Team Telecom" - an informal group comprised of officials from the Justice, Homeland Security, and Defense Departments - in their oversight of China Telecom (Americas) Corp, China Unicom (Americas), and Pacific Networks Corp, which all received FCC approval for U.S. operations about two decades ago.
China Telecom Corp’s U.S. unit urged the Federal Communications Commission (FCC) not to revoke the company's nearly two-decade old authorization to provide international telecommunications services to and from the United States. The filing late Monday came after the U.S. Justice Department and other agencies in April asked the FCC to revoke the authorization of China Telecom (Americas), the U.S. subsidiary of a People’s Republic of China (PRC) state-owned telecommunications company, citing national security concerns.
(Bloomberg) -- The Trump administration has fired multiple salvos against Huawei Technologies Co. since the start of a campaign to derail China’s technological ascendancy. The latest blow threatens to cripple the country’s tech champion.Huawei’s leafy campus in southern China has been engulfed in a state of emergency since the Commerce Department in May banned the sale of any silicon made with U.S. know-how -- striking at the heart of its semiconductor apparatus and aspirations in fields from artificial intelligence to mobile services. Its stockpiles of certain self-designed chips essential to telecom equipment will run out by early 2021, according to people familiar with the matter.Executives scurried between meetings in the days after the latest restrictions, according to one person who attended the discussions. But the company has so far failed to brainstorm a solution to the curbs, they added, asking not to be identified talking about private matters. While Huawei can buy off-the-shelf or commodity mobile chips from a third party like Samsung Electronics Co. or MediaTek Inc., it couldn’t possibly get enough and may have to make costly compromises on performance in basic products, they added.What Huawei’s brass fears is that Washington, after a year of Entity List sanctions that’ve failed to significantly curtail the company’s rapid growth, has finally figured out how to quash its ambitions. The latest curbs are the culmination of a concerted assault against China’s largest tech company that began years ago, when the White House tried to cut off the flow of American software and circuitry; lobbied allies from the U.K. to Australia to banish its network gear; even persuaded Canadian police to lock up the founder’s daughter. The latest measures however are a more surgical strike leveled at HiSilicon, the secretive division created 16 years ago to drive research into cutting-edge fields like AI inference chips. That unit surged in prominence precisely because it’s viewed as a savior in an era of American containment, and its silicon now matches rivals’ like Qualcomm Inc.’s and powers many of Huawei’s products: the Kirin for phones, Ascend for AI and Kunpeng for servers.Now that ambition is in doubt. Every chipmaker on the planet, from Taiwan Semiconductor Manufacturing Co. to China’s own Semiconductor Manufacturing International Corp., needs gear from American outfits like Applied Materials Inc. to fabricate chipsets. Should Washington get serious about throttling that spigot, Huawei won’t be able to get any of the advanced silicon it designs into the real world -- stymieing efforts to craft its own processors for mobile devices and radio frequency chips for 5G base stations, to name just two of the most vital in-house components. Dubbed the Foreign-Produced Direct Product Rule or DPR, Trump’s latest constraints have implications for China’s 5G rollout, for which Huawei is by far the dominant purveyor.The ban “focuses on HiSilicon-designed chips, which present the biggest threat to the U.S.,” Jefferies analyst Edison Lee wrote in late May. “The DPR could quash HiSilicon and then Huawei’s ability to make 5G network gears.”Read more: U.S.-China Fight Over Chip Kingpin Rattles Tech IndustryThe scene at Huawei’s Shenzhen nerve center invokes deja vu from a year ago, when Huawei billionaire Ren Zhengfei emerged from seclusion to declare his company’s survival in doubt. In the months following that proclamation, two things happened. U.S. companies, spooked by the prospect of losing billions, lobbied Washington for exceptions to the Entity List and suppliers from Intel Corp. to Micron Technology Inc. relocated assembly to increase foreign-produced components and continue supplying the Chinese company. Huawei employees -- spurred on by patriotism given perceptions the nation was under attack -- went to 24-hour days to design alternatives to American parts.The latest curbs could prove more effective because they remove Huawei’s chipmaker of choice from the equation. In theory, any chipmaker can petition the Commerce department for approval to ship Huawei-designed semiconductors, and opinion is divided on both sides of the Pacific as to how far the agency will allow shipments to proceed. But if it chooses to enforce the new curbs to the hilt, HiSilicon can no longer take its designs to TSMC or any foreign contract manufacturer. And local peers such as SMIC typically operate two generations behind TSMC.In fact, the latest curbs could severely disrupt production of some of the more critical and visible products in Huawei’s portfolio, including the Kirin brains and communications chips of future 5G phones, AI learning chips for its cloud services and servers and the most basic kinds of chips for networking. In February, Huawei touted how its next-generation antenna chips have been installed in “the industry’s highest-performance” 5G base stations. It may no longer able to ship those base stations after the chip inventory runs out.“HiSilicon won’t be able to continue its innovation any further until it’s able to find alternatives through self-development and collaboration with local ones, which will take years to mature,” said Charlie Dai, a principal analyst at Forrester Research. “We estimate that Huawei’s inventory of high-end chips (including baseband chips and CPUs for Huawei’s high-end smartphones) may last 12 to 18 months maximum.”Read about how Trump’s blacklisting of Huawei failed to halt its growth.Modern chip manufacturing at the highest levels simply cannot happen without American gear from the likes of Applied Materials, KLA Corp. and Lam Research Corp. Even in basic wafer fabrication, replacing TSMC is impossible because the Taiwanese foundry is the only company able to reliably make semiconductors using 7 nanometer or smaller nodes -- a must for high performance. Moving everything in-house -- essentially building an American-free plant -- is a pipe dream because it requires extreme ultraviolet lithography machines from ASML Holding NV -- a prerequisite for next-generation chipmaking. Yet ASML’s machines also use American technology from the likes of suppliers such as II-VI Inc. and Lumentum Holdings Inc, according to data compiled by Bloomberg. The best Chinese alternative could be Shanghai Micro Electronics Equipment, but its EUVs are again a few generations behind the Dutch firm’s.All that’s even before factoring in the uncertainty over Huawei’s access to design software developed by Cadence Design Systems Inc. and Synopsys Inc. The pair provide electronic design automation (EDA) tools that Hisilicon’s engineers rely on to draw up blueprints for next-generation processors. As Assistant Secretary of State for International Security and Nonproliferation Christopher Ford told reporters in late May: “If one wants to be working in the area of the very best chips, the chips that have the most computing power packed into the smallest space, it is necessary to use U.S. design tools right now because we have a commanding comparative advantage in that area.”“While there will be lots of opportunity to continue selling lesser quality chips to Huawei, this will be an additional challenge for the really good stuff,” he added.How Huawei Landed at the Center of Global Tech Tussle: QuickTakeIn the long run, the lack of consistent in-house chip supplies will disrupt China’s grand ambition of challenging the U.S. for global tech supremacy. More immediately, they threaten to curtail China’s crucial $500 billion 5G rollout -- a key piece of Beijing’s longer-term strategic vision.Huawei stands at the center of Beijing’s $1.4 trillion New Infrastructure initiative to seize the lead in 5G-based technology. Now it’s uncertain if it can even fulfill the 90-plus contracts it’s won so far to build networks for local operators like China Mobile Ltd. and other carriers around the world. That’s because HiSilicon’s chips are essential in products waiting to be shipped out. The uncertainty of not just fulfilling contracts -- but also around Huawei’s very ability to maintain clients’ networks once they’re up and running -- may also spook potential future customers.Internally, executives remain hopeful of finding a workaround, and are repeating the same mantra of a year ago -- doing without American technology isn’t impossible. “The good news is we still have time,” said one person involved in Huawei’s supply chain management. Chip architecture and supply “redesign takes time, but not something that can’t be done.”(Updates with table of Huawei’s chipmaking options after the tenth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Pacific Networks Corp and its wholly owned subsidiary ComNet (USA) LLC on Monday urged the Federal Communications Commission (FCC) not to shut down its U.S. operations. In April, the FCC issued show cause orders to three state-controlled Chinese telecommunications companies, including Pacific, citing national security risks. The FCC directed China Telecom Americas, China Unicom Americas and Pacific Networks to explain why it should not start revoking authorizations enabling their U.S. operations.
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(Bloomberg Opinion) -- Big spending numbers are being thrown around in China, once again. This time, it’s trillions of yuan of fiscal stimulus on all things tech. The plans are bold and vague: China wants to bring technology into its mainstream infrastructure buildout and, in the process, heave the economy out of a gloom due only partly to the coronavirus.But will this move the needle for China to achieve some kind of technological dominance? Or increase jobs, or boost favored companies? Not as much as the numbers would suggest, and possibly very little. A country covered in 5G networks makes for a tech-savvy society; it's less clear that this money will boost industrial innovation or even productivity.Over the next few years, national-level plans include injecting more than 2.5 trillion yuan ($352 billion) into over 550,000 base stations, a key building block of 5G infrastructure, and 500 billion yuan into ultra-high-voltage power. Local governments have ideas, too. They want data centers and cloud computing projects, among other things. Jiangsu is looking for faster connectivity for smart medical care, smart transportation and, well, all things smart. Shanghai’s City Action Plan alone is supposed to total 270 billon yuan.By 2025, China will have invested an estimated $1.4 trillion. According to a work report released Friday in conjunction with the start of the National People’s Congress, the government plans to prioritize “new infrastructure and new urbanization initiatives” to boost consumption and growth. Goldman Sachs Group Inc. analysts have said that new infrastructure sectors could total 2 trillion yuan ($281 billion) this year, and twice that in 2021. Funding is being secured through special bonds and big banks. The Shanghai provincial administration, for instance, plans to get more than 40% of its needs from capital markets, and the rest from central government funds and special loans. Thousands of funds have been set up in various industries since 2018, and some goals were set forth in previous plans.Policymakers are aggressively driving the fiscal stimulus narrative through this new infrastructure lens. Building big things is a tried and true fallback in China, from the nation’s own road-and-rail networks to its most important soft-power foreign policy, the belt-and-road initiative to connect the globe in a physical network for trade. It’s less obvious that this will work for technology. The reality is that the central-government approved projects add up to only around 10% of infrastructure spending and 3% of total fixed asset investment. The plans lack the focus or evidence of expertise to show quite how China would achieve technological dominance. Thousands more charging stations for electric cars won’t change the fact that the country has been unable to produce a top-of-the-line electric vehicle, and demand for what’s on offer has tanked without subsidies. With their revenues barely growing, China’s telecom giants seem reluctant to allocate capital expenditures toward the bold 5G vision. China Mobile Ltd. Chairman Yang Jie said on a March earnings call that capex won’t be expanding much despite the company being at the outset of a three-year peak period for 5G investments. Analysts had expected it to grow by more than 20%, compared to the actual 8.4%.Laying this new foundation for the economy, which includes incorporating artificial intelligence into rail transit and utilities, requires time, not just pledged capital. It’s hard to see the returns any time soon, compared to investments on old infrastructure. These projects are less labor intensive, so there’s no corresponding whack at the post-virus jobless rate that would help demand. State-led firms that could boast big profits from sales of cement and machinery on the back of building projects, for instance, can’t reap money as visibly from being more connected.Spending the old way isn’t paying off like it used to, either. Sectors such as automobiles and materials, big beneficiaries of subsidies and state funding, have seen returns on invested capital fall. The massive push over the years gave China the Shanghai maglev and a vast network of trains and roads. But much debt remains and several of those projects still don’t make money. Add in balance-sheet pressures and spending constraints, and every yuan of credit becomes less effective. There’s also expertise to consider. Technological dominance may require research more than 5G poles. China’s problem with wide-scale innovation remains the same as it has been for years: It always comes from the top down. Beijing has determined and shaped who the players will be. Good examples are the 2006 innovative society plan and Made in China 2025, published in 2015, that intended to transform industries and manufacturing, and have had mixed results.China is unlikely to get the boost from tech spending that it needs to solve present-day problems, especially in the flux of the post-Covid-19 era. Ultimately, the country will just fall back on what it knows best: property, cars, roads and industrial parks. The economy is still run by construction, real estate and manufacturing. Investors should think again before bringing in anything but caution.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Anjani Trivedi is a Bloomberg Opinion columnist covering industrial companies in Asia. She previously worked for the Wall Street Journal. For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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Jamaica-based telecommunications company Digicel Group has offered its Pacific business as security to creditors in a debt restructuring, a U.S. Securities and Exchange Commission filing shows. The SEC filings showed Digicel Pacific as a guarantor for $941 million in new secured notes maturing in 2024. Digicel is one of the biggest mobile phone carriers in the Pacific Island region.