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LG U+ employees install a 5G base station in Gwangju in April. (provided by LG U+)

LG U+ is in a bind following US government measures restricting transactions with Huawei. The company relies on 5G mobile communications base stations and LTE equipment from the Chinese company. LG U+ is insisting that no issues with equipment supplies are anticipated “before next year, when the construction of a 5G network for the Greater Seoul area will be nearly complete” – but the company stands to suffer a sizable impact if the situation drags out into the long term.

According to accounts on May 23 for telecommunications industry sources, the US government measures now prevent Huawei from using US parts to produce its communications equipment. LG U+ is using Huawei’s 5G and LTE mobile communications base station equipment in the key region of Seoul and its surrounding area. Huawei accounts for roughly 30% of the 5G equipment. LG U+ has announced plans to expand its 5G service coverage following its commercial launch last month, with 80,000 base stations to be built by the end of the year and a nationwide network by 2022.

LG U+ maintained that the US measures would not cause any issues for its network’s establishment.

“Huawei possesses the volumes for base station equipment to be supplied through the end of the next year,” an LG U+ official said.

“If things go according to plan, it will be installed for most regions in the Greater Seoul area within next year, so we are not anticipating any major issues. We also have plans for potential independent development or replacement if the situation drags out,” the official added.

LG U+ is the only one of South Korea’s three major telecoms that uses wireless communications equipment from Huawei. Its reasons have to do with the affordable price and outstanding technical quality of Huawei’s 5G base station equipment in comparison with other companies such as Samsung Electronics, Ericsson, and Nokia. With the current 5G technology adopting a non-standalone (NSA) method linked to LTE, LG U+ is also obliged to go with Huawei for 5GE after previously using its LTE equipment for the Greater Seoul area. This has caused trouble for LG U+ in the past when questions have arisen about Huawei’s security and issues have surfaced in connection with the trade war. LG U+’s share price stood at 14,000 won (US$11.76) on May 23, down 6.35% from the day before.

By Park Tae-woo, staff reporter

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