Telekom Malaysia recently announced a new research and development partnership with China’s ZTE, a company often compared to Huawei regarding its status as a vendor to avoid. According to their Memorandum of Understanding (MoU), both Telekom Malaysia and ZTE will collaborate on new products, services, and go-to-market strategies in multiple market segments, not only in Malaysia but the surrounding region as well.

The partnership, which is scheduled to run for at least three years, encompasses network and technology planning and digital transformation, integrating software-as-a-service (SaaS), platform-as-a-service (PaaS), and anything-as-a-service (XaaS). Telekom Malaysia’s Group CEO Dato’ Imri Mokhtar said in a statement, “We are pleased to partner with ZTE once more in providing new innovations that will serve today’s digital customers and industries.”

ZTE’s Managing Director, Steven Ge, also shared his optimism, saying, “We’re confident that our collaboration will bring forth new innovations and solutions to address the growing needs of today’s digital markets.” Ge added that ZTE is committed to supporting Telekom Malaysia’s digital transformation and talent ecosystem growth through its global expertise and resources.

However, this partnership might raise some eyebrows amongst US officials, who might view it as a covert attempt by Beijing to influence one of Washington’s closest allies in the region. Earlier in May, the US and the EU sent separate letters to the Malaysian government, warning against any measures that might allow Huawei equipment to be integrated into their 5G networks.

The warnings came after Malaysia decided to review the tender process, which resulted in Ericsson being chosen as the sole supplier for the country’s state-run wholesale 5G network. Telekom Malaysia’s partnership with ZTE indicates that Chinese suppliers may be increasingly convincing the nation’s telcos to collaborate with them. The industry will be closely observing whether this deal is an isolated event or indicative of Malaysia’s openness to doing business with Huawei and other Chinese companies.