Developing Telecoms | Huawei’s ambitions stifled by US security concerns

9 February 2012

Industry News

LATEST NEWS:

MTN extends managed services partnership with Ericsson in Ghana Indian Handset Market Witnesses 14.1% Growth in 2011 Network planning partnership to cover Southeast Asia Open framework boosts service delivery for Israeli operator Kosovan contract renewed for emerging markets provider Indian startup reneges on terms of infrastructure agreement Carrier grade Wi-Fi base stations enable connectivity in Ouagadougou Slow progress in Nepal, but penetration exceeds expectations First 4G-LTE network goes live in Hungary BSS transformation contract underway in Malaysia Mobile number portability set to shake up Chile’s mobile market South Africa, Nigeria, Kenya, Egypt and Morocco lead Tweeting in Africa Enthusiastic response to Tanzania’s first voice SMS service New platform allows fast uploading for Thai news reporters 3G growth healthy in Belarus as mobile market nears saturation Global top up service for Chinese expatriates Subscriptions on the rise in Kuwait over 2011 Free mobile access to Wikipedia for Africa & ME customers Political risk throughout North Africa may temper short-term growth RCom receives loan from Chinese banks Emergency communications terminals deployed in South Sudan Digital wallet services launching in China A strong 2011 for Ghana with more growth to come First Israeli-owned high-speed cable system goes live Indian government loses tax case to Vodafone Subscriber growth and LTE painting a pretty picture for UAE market 3G forecast looks rosy in China Partnership agreement expands satellite operations in Africa and Middle Eas... Rising penetration rates in Iran could be misleading Copper-Alternative Grounding Wire targets infrastructure theft OSS update for newest Thai operator Muscovites to receive modernised network Market Uncertainty Ahead for Established Players in Israel

Huawei’s ambitions stifled by US security concerns

Tuesday, 10 August 2010 09:59 | James Barton

Attention: open in a new window.

Huawei were reportedly outbid by Nokia Siemens Networks for the acquisition of Motorola’s networks business, but this may not be the true reason for the Chinese vendor’s failure to procure the US-based business.

In the last month, Huawei lost out on deals to acquire both Motorola’s networks business and the software supplier 2Wire (which was acquired by Pace). Sources are now claiming that in both auctions the Chinese vendor’s bids were at least US$100 million more than the winners.

Although Huawei is being advised by a selection of well-respected law firms, its attempts to break into the US market – such as its bids for the aforementioned assets – have been stymied by US concerns that it represents a security threat.

“There is still some scepticism in the US about any potential sale of technology assets to a Chinese company,” said Wilson Chai, an analyst at Mirae Asset Securities in Hong Kong. “After years of trying in the US, Huawei hasn’t made any significant breakthroughs in that market.”

There are indications that Huawei is determined to enter the American market, with reports suggesting that the company is considering significant steps towards proving its transparency – including a management overhaul, going public on the US or Hong Kong stock exchange, or the creation of a US-based company that would not be controlled by the Chinese firm. Huawei’s attempted acquisition of 2Wire reportedly fell through as the transaction would have been slowed by the US government review process.

However, the Motorola deal may simply have been a case of being outmanoeuvred by an opponent, with Bloomberg reporting that NSN clinched the deal by allowing Motorola to retain US$150 million in accounts receivable, cash and assets. In addition, the majority of the unit’s patents were retained by Motorola. NSN will go ahead with the deal to purchase Motorola’s networks business for US$1.2 billion.

Tags: