Feeds

Huawei could reorganize to win Sprint deal

Must compromise to appease US and Indian security

Internet Security Threat Report 2014

Huawei is looking increasingly ready to make compromises to allay the security concerns of various governments. The Chinese supplier denies all allegations that it is closely connected to its country's intelligence services, but is nevertheless running into clearance obstacles in several key markets. The Indian government has vetoed some large deals that would have gone to Huawei, and now it may need to restructure in order to win its first significant foothold in the US.

Huawei is reported to be bidding for its biggest deal yet in the US, where it has a few smaller contracts, such as part of Clearwire's network, but no footprint in tier one cellcos. The London Financial Times said Sprint was close to signing the Chinese supplier for unspecified mobile equipment, but this would require clearance from US security authorities.

In contrast to Europe, where Huawei has gained market share recently with few government obstacles, the US has treated the supplier with suspicion. As in India, a desire to protect native businesses from the onslaught of the Chinese giants may be a factor, but the official reason is security concerns. In 2008, Huawei was blocked from acquiring 3Com on these grounds, but the stakes are far higher now. Not only could the vendor's cost efficiencies and LTE technology get it new operator business, but it is rumored to be interested in gaining US firms of its own. These could include Motorola's wireless infrastructure activities and a stake in the planned LTE network being planned by Harbinger Capital.

Huawei has already reportedly offered the Indian governments unprecedented access to information about its structure and ownership, to prove it is not in the hands of military or intelligence agencies. It may have to go further for the north Americans - perhaps, as the FT suggests, listing its shares on a US or Hong Kong exchange, changing its structure, or setting up a separate US subsidiary. Huawei already has one US unit in Texas, which produces public financial report filings.

In the US, an inter-agency Committee on Foreign Investment can block takeovers of sensitive US assets by foreigners on national security grounds. It rarely vetoes large contracts, but technology and telecoms can be exceptions, especially in the climate of suspicion about online espionage or terrorism.

Copyright © 2010, Wireless Watch

Wireless Watch is published by Rethink Research, a London-based IT publishing and consulting firm. This weekly newsletter delivers in-depth analysis and market research of mobile and wireless for business. Subscription details are here.

Internet Security Threat Report 2014

More from The Register

next story
Brits: Google, can you scrape 60k pages from web, pleeease
Hey, c'mon Choc Factory, it's our 'right to be forgotten'
Of COURSE Stephen Elop's to blame for Nokia woes, says author
'Google did have some unique propositions for Nokia'
FCC, Google cast eye over millimetre wireless
The smaller the wave, the bigger 5G's chances of success
It's even GRIMMER up North after MEGA SKY BROADBAND OUTAGE
By 'eck! Eccles cake production thrown into jeopardy
Mobile coverage on trains really is pants
You thought it was just *insert your provider here*, but now we have numbers
Don't mess with Texas ('cos it's getting Google Fiber and you're not)
A bit late, but company says 1Gbps Austin network almost ready to compete with AT&T
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Cloud and hybrid-cloud data protection for VMware
Learn how quick and easy it is to configure backups and perform restores for VMware environments.
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.