Safaricom has vowed to stick with the firm even as the Government remains mum.
President Donald Trump last week signed an executive order whose ripples may reverberate beyond the US borders all the way to Kenya.
With one stroke of the pen, Trump declared a national emergency giving US companies legal grounding to ban information and communication technology suppliers perceived to be a security threat.
The order came after months of push by the Trump Administration for local firms and Western governments to rethink installing ICT infrastructure made by China's tech giant Huawei.
“Foreign adversaries are increasingly creating and exploiting vulnerabilities in information and communications technology and services, which store and communicate vast amounts of sensitive information, facilitate the digital economy, and support critical infrastructure and vital emergency services, in order to commit malicious cyber-enabled actions, including economic and industrial espionage against the United States and its people,” reads the executive order in part.
Analysts view this as an escalation of the US-China trade war that threatens to have a domino effect on the global economy and hurt developing economies such as Kenya the most.
Trump’s move came in the wake of warnings by US intelligence agencies and investigative media reports that Huawei is intricately linked to the Communist Party of China (CPC) and could be used as an agent of State-sanctioned espionage.
One report by Bloomberg earlier this month claimed that British telecom giant Vodafone Group found hidden ‘backdoors’ on equipment supplied and installed by Huawei in one of its fixed-line networks in Italy.
A backdoor is a malicious computer programme used to provide the attacker with unauthorised remote access to a compromised personal computer by exploiting security vulnerabilities.
The vulnerabilities, dating back almost eight years, were reportedly discovered on Vodafone’s fixed access network and broadband network gateways.
These systems enable the transmission of internet traffic as well as authenticating subscribers.
The backdoors, according to the report, posed a risk to subscribers where their personal computers and home networks could be accessed by third parties.
“Vodafone asked Huawei to remove backdoors in home internet routers in 2011 and received assurances from the supplier that the issues were fixed, but further testing revealed that the security vulnerabilities remained,” reported Bloomberg.
Vodafone, which is Safaricom’s largest shareholder, denied the report saying the issues raised were all resolved in 2011 and 2012 and that they could not have given Huawei unauthorised access to subscriber data.
Huawei is currently Kenya’s largest telecommunications equipment provider, and this has raised questions over the country’s policy direction in the wake of the escalating China-US trade war. The company is responsible for laying a big chunk of the country’s telecommunications network used by mobile network operators to reach the over 42 million mobile phone subscribers.
According to its 2018 Kenya Sustainability Report, Huawei has built 3,500 mobile base stations in Kenya, translating to 62 per cent of the country’s 5,565 sites. Safaricom’s M-Pesa platform also runs on Huawei.
At the same time, the company is responsible for laying down 4,000 kilometres of fibre optic network that supply millions of subscribers with mobile and fixed data services. It has also spread its smartphone footprint in Kenya over the past few years and now commands a sizable share of the smartphones and tablet devices market.
Safaricom chief executive Bob Collymore said the company would continue its relationship with Huawei into the foreseeable feature despite Washington’s latest move.
“Huawei has been with us for a very long time,” he said when asked if Safaricom would review its relationship with the company. “They provide our mobile money service, core network, transmission and are at the front end of 5G development. Our policy as a company is not going to be driven by Donald Trump.”
Mr Collymore further said despite occasional disagreements, Safaricom is satisfied with the competence and quality of work delivered by Huawei. He is taking a cue from Safaricom’s parent company - Vodafone - which has ignored boycott calls from the US and is working with Huawei in exploring 5G network deployment.
At the same time, uprooting the network infrastructure already laid out by Huawei is very costly and both mobile network operators and Huawei stand to lose billions.
The value of Safaricom’s network infrastructure, for instance, currently stands at Sh63.5 billion, and its operational life is estimated at between three and 10 years.
Another Sh18.5 billion has been spent on ongoing infrastructure works. The company has also invested an additional Sh17.8 billion in fibre expected to last for 25 years.
Uprooting even 50 per cent of this capital infrastructure and installing new equipment from other vendors could result in losses running into billions of shillings that Safaricom is unprepared to absorb.
The Kenyan government has largely remained silent and is yet to give a clear position on the issue, instead referring it to regional bodies. Late last year, ICT Cabinet Secretary Joseph Mucheru said the African Telecommunications Union (ATU) should give a directive on what course of action African governments should take.
“There have been claims that Huawei and ZTE are listening to our conversations and…I think ATU should be able to give us a position,” he said while addressing newly elected ATU Secretary General John Omo who happens to be Kenyan. Huawei has for its part repeatedly denied the claims that it is being used to carry out espionage activities for China through the digital infrastructure it installs across the globe.