Huawei seeks rethink by U.S. after bid ban

PUBLISHED : Saturday, 22 October, 2011, 12:00am
UPDATED : Saturday, 22 October, 2011, 12:00am

Huawei Technologies described its relationship with the United States government as being 'out of sync' after the company was excluded from a major telecommunications project because of national security concerns.

The Shenzhen-based manufacturer - the world's second-largest supplier of telecommunications equipment - was told by the US Department of Commerce earlier this month that it could not compete for tenders on the 'Nationwide Wireless Network for Public Safety' programme. It is part of an initiative by US President Barack Obama to make high-speed 4G wireless services available to at least 98 per cent of Americans within five years.

The privately held firm had requested a formal explanation for the US action, but received no response.

John Roese, a senior vice-president at Huawei and general manager of the firm's research and development operations in North America, said there needs to be a rethink in government policy to reflect the state of the industry. 'So the current status of our relationship with the US government is really one that we're a bit out of sync,' he said.

Speaking at the AsiaD conference in Hong Kong yesterday, Roese said: 'None of the [US government's] concerns are legitimate in reality. But perception is sometimes reality in people's minds.'

He said part of Huawei's challenge is 'educating the US government and politicians in the US and around the world that we're in a highly globalised environment'.

'If you wanted to build a wireless network today in the US, your choice of vendors would be a Swedish vendor, a Finnish vendor, a French vendor and two Chinese vendors. Those are the tier-one suppliers,' he said. 'There's no North American vendor that can build that.'

He was referring to, respectively, the world's leading telecommunications equipment suppliers: Ericsson, Nokia-Siemens Networks, Alcatel-Lucent, Huawei and ZTE Corp. Canadian supplier Nortel Networks Corp went bankrupt in 2009 and its business units sold off.

Despite being among the world's top-tier industry suppliers, Huawei has had various setbacks in its US expansion efforts. The company had earlier failed in its bid to become an infrastructure supplier to Sprint Nextel, the third-largest wireless telecommunications network operator in the US, because of national security concerns. For the same reason, it failed to buy US companies 3Leaf Systems and 3Com.

Roese said innovation will ultimately overcome this false perception of Huawei as a security risk. Founded in 1987, Huawei has eight plants in the country, including three research and development centres. It had about 1,500 workers in the US as of December last year.

In a report, IHS iSuppli analyst Zhao Hailin said Huawei was gearing up to 'expand its revenue at [a] rapid clip' to reach its goal of US$100 billion annual turnover by 2020.