U.S. urges S. Korea to reject Huawei goods, citing security risks - Chosun Ilbo (updated)

LG Uplus

23/05/2019 03:39

(Adds LG Uplus share drop in paragraph 3, S. Korean statement
in paragraph 9)
    SEOUL, May 23 (Reuters) - The U.S. government is lobbying
South Korea not to use Huawei Technologies Co Ltd  HWT.UL 
products, a South Korean newspaper reported on Thursday, amid a
wider push by Washington to get its allies to reject the Chinese
tech firm's goods.
    In one incident, a U.S. State Department official said in a
recent meeting with a South Korean counterpart that local telco
LG Uplus Corp  032640.KS , which uses Huawei's equipment, should
"not be allowed to serve in sensitive areas in South Korea",
Chosun Ilbo reported. The official added Huawei needs be
eventually driven out of the country, if not immediately.
    LG Uplus shares dropped 6 percent in Thursday's morning
trade, which compared to a 0.4 percent drop in the benchmark
KOSPI  .KS11 .
    "LG Uplus has not received any statements or requests from
either South Korea’s foreign ministry or the United States
regarding our use of Huawei equipment," a LG Uplus official told
Reuters on Thursday.
    Washington has been pressing its allies not to use equipment
made by Huawei over concerns it could be used for espionage or
cyberattacks, a concern that Huawei says is unfounded.
    The anti-Huawei campaign intensified last week, when U.S.
President Donald Trump signed an executive order that
effectively banned the use of Huawei equipment in U.S. telecom
networks on national security grounds. Additionally, the
Commerce Department put limits on the firm’s purchases of U.S.
technology.
    While South Korea is a U.S. ally, China is its biggest
export market. China took in nearly a quarter of South Korea's
total exports in the first four months of this year, according
to South Korea government data.
    The U.S. government has repeatedly sent the message to South
Korea's Foreign Ministry through various diplomatic channels
that using Huawei products could cause security problems, Chosun
Ilbo reported, citing an unnamed diplomatic source in Seoul.
    "The U.S. has stressed the importance of security for 5G
equipment, and we are aware of the U.S.'s position," South
Korea's Foreign Ministry said in a statement, adding that Seoul
and Washington have been in continued talks on this issue, but
declining to elaborate.
    The U.S. Embassy in Seoul did not immediately respond to
request for comment.

 (Reporting by Joyce Lee and Heekyong Yang; Additional reporting
by Choonsik Yoo; Editing by Sam Holmes)
 ((jungyoon.lee@thomsonreuters.com; +82 2 3704 5609; Reuters
Messaging: jungyoon.lee.thomsonreuters.com@reuters.net))