Chinese telecoms vendor Huawei is considering an IPO in order to tap into the US market, according to media reports.
The Asian giant has been seeking advice from investment banks on how and where to float, in order to make itself more transparent and…
Chinese telecoms vendor Huawei is considering an IPO in order to tap into the US market, according to media reports.
The Asian giant has been seeking advice from investment banks on how and where to float, in order to make itself more transparent and more likely to win big contracts in the US.
As reported previously, Huawei has effectively been shut out of the US amid concerns of national security, as the company has been linked with the Chinese government. There are fears that the Chinese military could use Huawei’s equipment to infiltrate US communications.
The vendor has repeatedly denied this and in July appointed Donald “Andy” Purdy as its chief security officer in the US in an attempt to counter such allegations. Purdy has previously worked with the Department of Homeland Security and assisted the White House in drafting cyber-security policy.
Huawei has not chosen a bank to handle the potential IPO but is leaning towards a US listing over London or Hong Kong, according to sources.
However, analysts are sceptical that an IPO will actually pacify critics’ concerns about the company. “An IPO is not as much of a guarantee of transparency as some people believe,” Dana Cooperson, VP – network infrastructure at Ovum, told TelecomFinance. “It’s what you do after the listing which matters. We don’t think an IPO will be a panacea for Huawei’s problems in the US.”
Last year the company posted revenue of US$32.396bn and net profit of US$1.85bn, according to its annual report.
Regarding cyber security allegations, the company stated: “Huawei has always been open and transparent in its collaboration with all parties involved in addressing the global issue of cyber security, and work with these partners through a variety of platforms, organizations, and channels…In countries such as the US, Italy, and Spain, Huawei commissioned local third-party testing institutes to independently examine our products for security risks and certify them for release.”
Huawei declined to comment citing company policy.
