Friday, February 7, 2020

Pence dismisses idea of U.S. buying Nokia, Ericsson to challenge Huawei

© Reuters. U.S. President Trump delivers State of the Union address at the U.S. Capitol in Washington© Reuters. U.S. President Trump delivers State of the Union address at the U.S. Capitol in Washington

By David Shepardson

WASHINGTON (Reuters) - U.S. Vice President Mike Pence on Friday declined to endorse an unusual suggestion from U.S. Attorney General William Barr that the United States consider taking control of two major foreign rivals of China-based Huawei Technologies Co Ltd.

Barr, a former general counsel at Verizon Communications Inc (N:VZ), said on Thursday the United States and its allies should consider taking a "controlling stake" in Finland's Nokia (HE:NOKIA) and Sweden's Ericsson (ST:ERICb) to counter Huawei's dominance in next-generation 5G wireless technology.

Pence suggested an alternative approach when asked by CNBC for his response.

"Great respect to Attorney General Barr, but we believe the best way forward is what Ajit Pai announced just over the last several days," Pence said, referring to the Federal Communications Commission's chairman's efforts to free up more spectrum for 5G wireless use.

"That's the plan the president has endorsed and will be carrying forward," Pence said, adding that the United States can expand 5G "by using the power of the free market and American companies."

A spokeswoman for Barr declined to comment. The White House and a spokesman for Pai did not immediately comment.

Shares in Nokia rose 4% and Ericsson shares were up nearly 5% Friday. Both companies declined to comment.

Nokia and Ericsson have a combined market capitalization of about $53 billion and it is unclear what source of funds the U.S. government could potentially tap to take stakes in the firms or if foreign regulators would approve.

In a remarkable statement underscoring how far the United States may be willing to go to counter Huawei, Barr on Thursday disclosed proposals "by the United States aligning itself with Nokia and/or Ericsson."

Barr said the alignment could take place "through American ownership of a controlling stake, either directly or through a consortium of private American and allied companies."

Barr said that "putting our large market and financial muscle behind one or both of these firms would make it a far more formidable competitor and eliminate concerns over its staying power, or their staying power."

"We and our closest allies certainly need to be actively considering this approach," he added.

Original Article ©Copyrights Reuters

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