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Safaricom’s Decision to Suspend Its Huawei-Powered 5G Network is Just a Business Story

SIMON MAINA / AFP

It’s going to be very tempting for a lot of people in Washington, D.C. to read the news that Kenya’s leading telco, Safaricom, suspended the rollout of its new Huawei-powered 5G network as evidence that the company finally came to its senses about the dangers of using equipment made by the Shenzhen-based electronics giant.

That’s probably not an accurate reading of the situation, though.

First of all, both Safaricom and the Kenyan government have been among Huawei’s most outspoken defenders in Africa and have given no indication whatsoever that any of the allegations against the company are of concern.

Secondly, there’s a good business case to be made for why Safaricom really doesn’t need to rush its 5G deployment. Installing all-new towers, relay equipment, and networking gear is extremely expensive, especially in developing countries where the number of consumers with costly new 5G enabled phones is still extremely small.

Meantime, Kenya, like a lot of emerging markets, has millions of consumers who are still using basic 2G and 3G services much less 4G. So, it makes a lot of sense that CEO Peter Ndegwa would want to focus his efforts on upselling those customers using the existing network rather than force a small slice of the market to buy new phones and pay a lot for ultrafast connectivity.

Also, don’t forget that Safaricom wants a piece of Ethiopia’s soon-to-opened mobile telecom sector so Ndegwa may want to save his limited resources, especially now during the ongoing recession, to invest in new markets.

Of course, it’s possible, although somewhat improbable, that Ndegwa is now more concerned today about Huawei security issues than his predecessors were. Sure. It’s just that we haven’t seen any proof to support that contention.

So, at least for now, all of the publicly available evidence indicates that Safaricom’s decision to suspend its 5G plans is just a business story and nothing more.

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