Chinese vendor Huawei has said it is no longer interested in the US market after years of trying and failing to convince Washington legislators that it is not a security threat.
The disclosure came from executive vice-president Eric Xu at an analyst…
Chinese vendor Huawei has said it is no longer interested in the US market after years of trying and failing to convince Washington legislators that it is not a security threat.
The disclosure came from executive vice-president Eric Xu at an analyst summit.
In a statement Huawei subsequently said: “Mr. Xu’s statement reflects the realities of our carrier network business in the US…Considering the situation our company currently faces in the US, it would be very difficult for the US market to become a primary revenue source or a key growth area for our carrier network business in the foreseeable future.”
The vendor was keen to stress that it was not exiting the US. The company has had operations in the country since 2001 and has a number of offices and R&D centres there.
However, as it has tried to expand its operations further it has often been stymied by politicians. Huawei was blocked by CFIUS from acquiring American server company 3Leaf Systems in 2011. In 2008 it was forced to drop an offer to acquire US equipment maker 3Com alongside PE firm Bain Capital.
Last October the US House Permanent Select Committee on Intelligence concluded its 11-month investigation into Huawei and fellow Chinese state-owned vendor ZTE.
“The Committee on Foreign Investments in the United States (CFIUS) must block acquisitions, takeovers, or mergers involving Huawei and ZTE given the threat to US national security interests,” the House panel recommended at the time.
The Republican chair of the panel, Mike Rogers, said: “We have to be certain that Chinese telecommunication companies working in the United States can be trusted with access to our critical infrastructure.”
The committee said that Huawei and ZTE had failed to alleviate its concerns about links to the “communist government of China”, which it alleged of cyber espionage.
It recommended that American businesses should avoid doing business with the vendors.
Subsequently Softbank and Sprint have pledged to the intelligence committee not to use Huawei equipment, as the Japanese telco looks to gain regulatory approval for its proposed acquisition. The parties are making the same promises to the Committee on Foreign Investments in the United States (Cfius), according to congressman Rogers. They also said they would remove Huawei components from Clearwire’s network should Sprint’s US$2.2bn takeover offer be successful.
Consequently Huawei is turning its focus to other markets: “The growth of Huawei’s carrier network business is primarily from developed markets in other parts of the world.”
