Huawei Technologies will expand its already large presence in Brazil with a new strategy: to sell premium cell phones.
The move by the Chinese company represents another setback for US President Donald Trump, who seeks to persuade his Western allies to ban Huawei’s next-generation mobile technology. The US says the equipment provided by the Shenzhen-based company serves the Chinese government’s spy services.
Huawei already supplies equipment to all major telephone operators in Brazil, but has not sold mobile phones in the domestic market for five years. The company announced plans on Tuesday at an event held at São Paulo’s only six-star hotel, the Tangara Palace. Huawei will start selling P30 Series handsets in retail networks starting May 17, with suggested prices ranging from $2,499 to $5,499, in line with the values competitors.
The company sold cell phones in Brazil for a brief period in 2014, focusing on mid – and low-cost bands, but concluded that the approach was not sustainable, said Ketrina Dunagan, Huawei’s senior vice president of consumer marketing.
“It was kind of a test and after that we got together and rethought the strategy. The smartphone market in Brazil is not growing overall, but the premium segment is,” Dunagan said in an interview. “The P30 series is perfect for that.”
Although the number of mobile lines in Brazil dropped 3% in March from the previous year, the lines of more expensive postpaid plans have increased to almost half of the total, according to Anatel. Migration to these plans with data packages demands better smartphones, as Brazilian consumers are increasingly seeing videos and shopping — not to mention access to social networks, a national obsession — with their mobile devices.
Present at the event, Eurico Teles, president of Oi, said he did not see security problems in Huawei equipment. Oi operates the second largest fiber optic network in the world and has just completed a massive debt restructuring.
“Thanks to Huawei, Oi is modernizing its network,” Teles said in an interview at the event.” We control our entire network and all our security software. If there were any kind of technological insecurity, Huawei would not be selling around the world.”
Huawei is under investigation in the United States, which considers the company a threat to national security on the grounds that it could build undetectable channels in 5G technology and allow the Chinese government to spy on US communications. Huawei denied the allegations and said it was not a Beijing tool.
Vodafone, Europe’s largest telephone operator, admitted to Bloomberg News on Tuesday that it found security holes in Huawei equipment in 2009. Although Vodafone claims that the problems were resolved, the disclosure could further affect the reputation of the largest technology company from China.
During a visit to the United States in March, President Jair Bolsonaro and Trump discussed strategies to increase trade between the two largest countries in the Americas. Although Trump has recommended a veto to the Chinese firm, Bolsonaro said Brazil would try to negotiate with as many countries as possible without ideological bias. The US and China are Brazil’s largest trading partners, the world’s largest exporter of various commodities such as iron ore, beef and soy.
The luxurious event held on Tuesday evening illustrates how Huawei is taking the Brazilian market seriously. TV Globo presenter André Marques was a master of ceremonies and made jokes about his pronunciation of Chinese words. One exhibit showed photos that photographer Bob Wolfenson took with P30 cameras, equipped with Leica Camera lenses – which was also involved in a recent controversy with China.
By doing business with companies and partners around the world, Huawei executives “are very respectful of local and international privacy laws and security laws in all countries where we operate or, frankly, we would not be in this business,” said Dunagan when asked about security issues.