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Huawei dismisses NSA backdoor claims as profits soar

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It’s been a mixed week for Chinese telecoms giant Huawei after the firm announced impressive financials but was forced again to deny allegations of security weaknesses in its products.

The device and telecoms kit maker announced its unaudited financials on Wednesday, claiming sales revenue for 2013 will reach between 238 billion and 240 billion yuan (£24bn). This will be a year-on-year jump of around 8 per cent, or 11.6 per cent when measured in US dollars.

Operating profits are set for an even bigger rise, with Huawei predicting 28.6bn-29.4bn yuan (£2.9-3bn) for the year – which will be a jump of over 40 per cent compared with 2012’s figure of 20bn yuan (£2bn).

Continued growth in emerging and European markets apparently made up for a less impressive showing in the US, Australia and other mature markets where security concerns over its products and alleged ties to Beijing persist.

Those question marks were raised again as CFO Cathy Meng was forced to deny allegations made in a Der Spiegel article published last month that the NSA had installed back doors in kit made by Huawei and other tech providers.

“We have seen no incidents on networks due to security problems,” she said at the press conference, according to AP. “A lot of reports say Huawei equipment has more vulnerabilities or is more easily breached. These reports are groundless.”

There is a certain irony that a company which US lawmakers branded a national security threat by virtue of perceived links with the Chinese military is now accused of having vulnerabilities in its kit engineered by US spooks.

One of the few Western markets to adopt a conspicuously open-armed approach to Huawei has been the UK, but even here reports emerged at the weekend of potential problems.

The Sunday Mirror ran a story claiming that the Home Office, Ministry of Justice and Crown Prosecution Service were forced to stop using Huawei videoconferencing equipment, "acting on specific intelligence" that it may allow third parties to listen in.

However, the Shenzhen giant was quick to denounce the report as “inaccurate” and it was not available on the Mirror site at the time of writing.

An official statement sent to The Reg had the following:

Huawei is a private, 100 per cent employee-owned company. We share the same goal as our customers to raise the standards of cyber security, to ensure technology benefits consumers. Our video conferencing equipment is based on the industry’s global standards, to suggest it is specifically open to abuse would be misleading.

®

Internet Security Threat Report 2014

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