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Teresa Elena Frontado

The United States is opening Venezuela’s telecommunications sector to new investment and technology while explicitly excluding Chinese companies, a move that could reshape a market where Huawei and ZTE have become deeply embedded and give Western suppliers an opening as the country expands its 5G networks.
The US Treasury Department’s Office of Foreign Assets Control (OFAC) on Friday issued two general licences easing some sanctions restrictions on Venezuela’s telecommunications sector, including transactions involving state-owned provider CANTV and mobile operator Movilnet.
But both licences specifically exclude transactions involving people or companies in China, Russia, Iran, North Korea and Cuba, as well as entities owned or controlled by, or in joint ventures with, them.
The move extends to telecommunications a restriction Washington has already applied as it selectively eases sanctions on Venezuela.
Earlier authorisations covering the country’s oil sector similarly opened the door to certain transactions while excluding China-linked entities, allowing the Trump administration to loosen economic restrictions on Caracas without extending the benefits to one of its principal geopolitical rivals.


China’s embassy in Washington criticised the restrictions and vowed to defend Chinese companies affected by them.
“We stand firmly against illicit unilateral sanctions that have no basis in international law or the authorisation of the UN Security Council,” an embassy spokesperson said. “We will firmly protect Chinese businesses’ legitimate and lawful rights and interests.”
The US Treasury Department did not immediately respond to questions about the rationale for excluding Chinese companies or whether the measure was intended to reduce China’s role in Venezuela’s telecommunications infrastructure. The Chinese embassy in Washington also did not immediately respond to a request for comment.
In telecommunications, however, the China carve-out could prove particularly consequential. Huawei and ZTE became important suppliers to Venezuela as US sanctions and compliance concerns curtailed other international companies’ ability or willingness to work with government-linked entities.
“The importance of Chinese companies and Chinese technology in Venezuela’s telecommunications companies is enormous,” said Alcides Leon, a veteran Venezuelan technology journalist who has covered the sector for decades.
In the case of state-owned CANTV and Movilnet, Leon said, most of their technology now comes from Huawei, making a shift away from Chinese suppliers potentially difficult and costly.
Restrictions may affect networks’ maintenance, repair and components
The restrictions could affect not only future investment but also the maintenance, repair and replacement of components in networks that already rely heavily on Chinese equipment, he said.
As one example, Leon estimated that about half of the technology used by Digitel, one of Venezuela’s largest private mobile operators, comes from Huawei, with the other half supplied by Sweden’s Ericsson.
The new US authorisations come as Venezuela modernises its telecommunications infrastructure and begins a transition to 5G, potentially creating opportunities for new equipment suppliers and investors.
General License 61 allows US persons and companies to provide the goods, technology, software, and services needed to install, maintain, repair, upgrade, or operate telecommunications infrastructure in Venezuela.
The authorisation covers equipment and spare parts, fibre-optic capacity, satellite bandwidth, cloud services, data storage, servers, software and network-support services.
It also explicitly permits transactions involving CANTV, Movilnet and telecommunications regulator Conatel.
However, it does not authorise transactions involving a person located in or organised under the laws of China, or an entity owned or controlled by, or in a joint venture with, such a person.
A second authorisation, General License 62, could have more far-reaching implications for the industry’s future.
It allows companies to negotiate conditional contracts for new investment in Venezuela’s telecommunications sector, including establishing new telecommunications providers, expanding existing operations and forming joint ventures.
The licence also permits companies to submit bids or proposals in response to public tenders, although they cannot perform the resulting contracts or commit capital without separate OFAC authorisation.
Chinese companies are again expressly excluded.
Leon described the two licences as potentially marking a turning point for Venezuela’s telecommunications industry.
The first provides a route for operators to obtain technology, software and support that had become difficult to access under sanctions, while the second could help reopen the sector to future international investment, he said.
But excluding China means opening could also redirect Venezuela away from the suppliers that expanded their presence during the sanctions era.
Huawei, ZTE ‘came to the rescue of telecommunications in Venezuela’
Huawei and ZTE “came to the rescue of telecommunications in Venezuela” while restrictions were in place, Leon said, allowing significant network deployment using Chinese technology as some other international suppliers pulled back. Their role was not limited to government companies, he added, but extended to private operators.
Huawei and ZTE did not immediately respond to requests for comment.
Chinese suppliers had been involved in Venezuela’s telecommunications sector well before the latest US sanctions.
A CANTV prospectus details a US$144 million contract signed in 2019 by CANTV, Movilnet and Huawei to deploy 4G and 5G technology. The project included the supply, installation and configuration of 900 LTE radio base stations and was financed through Venezuela’s National Development Fund.
Huawei and ZTE also took part in earlier generations of Venezuelan mobile and fixed telecommunications infrastructure as economic and technological cooperation between Beijing and Caracas expanded under former president Hugo Chavez and his successor Nicolas Maduro.
That history leaves Venezuela facing a potentially complicated technological transition.
Leon said opinions among Venezuelan telecommunications specialists differed over the legacy of China’s involvement. Chinese technology allowed networks to continue expanding during a period when access to other suppliers was constrained, he said, but some specialists argue that dependence on Chinese systems also contributed to technological isolation and compatibility problems.
The new US rules are therefore likely to “change the landscape of telecom providers in Venezuela”, Leon said, while making it more difficult to maintain some existing networks built with Huawei and ZTE components.


Potential beneficiaries could include European suppliers Ericsson and Nokia.
“Ericsson and Nokia are going to have an enormous opportunity to gain ground,” Leon said, particularly in the deployment of fibre and 5G infrastructure.
The United States does not have a major domestic supplier offering the full range of 5G radio-network equipment produced by Huawei, Ericsson and Nokia, meaning European technology could play an important role in projects enabled by the new US authorisations.
Venezuela has already begun allocating spectrum for next-generation networks.
Two spectrum auctions last year allocated frequencies to expand 4G and 5G services. In September, Movilnet was awarded 100MHz of spectrum in the 3.5GHz band for 5G deployment, while CANTV obtained additional spectrum in the 2.6GHz band.
The changes are taking place amid a potentially broader shake-up of Venezuela’s telecommunications market.
Spain’s Telefonica has been pursuing a wider retreat from most of Latin America, raising questions about the future ownership of its Venezuelan subsidiary Movistar, one of the country’s major mobile operators.
Leon said the expected departure could change both the ownership structure of Venezuela’s telecommunications industry and relationships between operators and technology suppliers. The sector is closely watching who might acquire the business and whether a change in ownership could bring fresh investment, he said.
Applying Washington’s China carve-out to telecommunications puts its Venezuela sanctions policy into a sector at the centre of a much wider US-China technological rivalry.
Leon said the licences could be interpreted in two ways: as a further easing of sanctions that could help revive Venezuela’s telecommunications sector, or through a geopolitical lens as an attempt by Washington to push back against China’s ambitions in global 5G networks.
Whether the new authorisations ultimately reduce China’s position in Venezuela may depend on how willing Western companies are to enter a market still carrying significant political and economic risks – and how easily Venezuelan operators can diversify away from Chinese technology already embedded in their networks.


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Move could test Huawei and ZTE’s long-standing foothold as Washington extends its China reach from oil to another strategic sector


Move could test Huawei and ZTE’s long-standing foothold as Washington extends its China reach from oil to another strategic sector.


US targets China’s telecoms grip in Venezuela with new sanctions carve-out

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Move could test Huawei and ZTE’s long-standing foothold as Washington extends its China reach from oil to another strategic sector

Move could test Huawei and ZTE’s long-standing foothold as Washington extends its China reach from oil to another strategic sector