Huawei Electronics Co. Ltd. is in early-stage talks with U.S. telecommunications companies to license its 5G networking technology, bypassing a ban placed on its exporting its equipment to the U.S. in May just as related bans are starting to affect the company.

Confirmation of the talks came via Vincent Pang, Huawei senior vice president and board director who told Reuters Friday that some firms he declined to name had expressed interest in either a long-term deal or a one-off transfer.

A long-term deal would involve a firm coming to a licensing agreement that would allow them to manufacture technology based on Huawei patents over a long period of time. A one-off transfer would involve buying the rights to existing Huawei technology, code and patents.

Although it’s a way for Huawei to make money from its technology in the U.S. outside of the Trump Administration ban, there may also be a bigger play involved. Zak Doffman at Forbes suggested that in offering to open its code to U.S. companies and accompanying due diligence, Huawei could counter allegations that its code has hidden backdoors by letting others access it. The theory goes that in doing so and showing that its code is safe, Huawei gets to prove that the ban on its 5G tech is politically motivated and has nothing to do with national security.

A suggestion last month at Huawei would license its tech to U.S. companies was dismissed at the time by a State Department official who claimed that it was “not realistic that carriers would take on this equipment and then manage all of the software and hardware themselves.”

The news that Huawei is in talks to license their tech in the U.S. comes as the other ban targeting the company, the ban on exports of U.S. technology to the firm, continues to bite.

According to the Financial Times, company executives have admitted that they’re struggling to replace Google apps on its mobile phones and that it may be years before they can develop their own alternatives.

The first Huawei phones sans Google apps were the Mate 30 and Mate 30 Pro announced Sept. 19. Huawei can still use Android as an operating system on the devices since it’s open source, but they can’t license an official version that includes Google apps. The company kicked off an “iron army” overhaul of its business in August while revealing HarmonyOS, its Android alternative, the same month, but it would appear that the latter is still some time off from being ready for widespread deployment.

Despite the trade bans and related issues due to the U.S. China trade war, Huawei’s bottom line has yet to suffer. The company reported a 27% increase in third-quarter revenue Oct. 16 driven by a surge in shipments of smartphones before the Android ban kicked in.

Photo: Duncan Riley