US ban on China’s biggest supplier of police mobile radio systems may help Motorola
- The US action marks a big challenge to Shenzhen-based Hytera, which has been expanding its international sales
Hytera Communications Corp, China’s biggest supplier of professional mobile radio (PMR) systems used by police, is expected to lose ground in the world’s largest economy, as a ban on US federal agencies buying equipment from the company takes effect on Tuesday.
The prohibition points to the growing wariness in the US over Chinese hi-tech providers, which are regarded as potential national security threats, amid an escalating trade dispute between Washington and Beijing.
It comes a year before the US Congress’ mandated deadline of August 2020, when all federal contractors must stop doing business with those five Chinese hi-tech suppliers.
For Hytera, the US federal ban represents a challenge to its international expansion efforts, which has been driven by strategic corporate acquisitions over the years in the US and Europe.
That strategy has enabled the firm to broaden its range of products and brands, as well as increase distribution around the world and add more sophisticated engineering talent. In 2017, Hytera acquired UK-based PMR communications gear vendor Sepura Group, which had the second largest market share in public security in Europe.
The US ban, however, could increasingly put Hytera on the defensive in the US, where its biggest competitor is Motorola Solutions. Greg Brown, Motorola’s chairman and chief executive, said the company expected “to get traction more in 2020 than this year”, according to an online transcript of his call with analysts after reporting the firm’s second-quarter earnings last week. The two companies have been involved in a patent dispute since 2017 over Hytera’s alleged infringement of certain Motorola patents.
Representatives from Hytera did not immediately reply to an emailed query. Calls to the company also went unanswered.
The company was founded in 1993 by Chen Qingzhou, who had previously worked as a sales manager at a mobile radio communications factory in the southeast coastal province of Fujian.
Chen, who serves as Hytera’s president and chief executive, has built the company into a leading global provider of PMR systems with a market capitalisation of 16.8 billion yuan and nearly 10,000 employees as of 2018. The company, which sells its products in more than 120 countries, is also a major contributor to China’s own police wireless communications standard.
In a statement after the company acquired Sepura in 2017, Chen described the PMR communications industry as “seeing rapid evolution”, adding that Hytera would incorporate more new technologies.
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