Huawei Admits Defeat And Withdraws From US Market

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Huawei is to withdraw from the US telecommunications market after US national security concerns

Huawei Technologies is finished trying to sell its telecommunications equipment in the United States of America.

The Chinese technology company, which for several years has come under the scrutiny of US lawmakers and regulators who believe that Huawei’s alleged close ties to the Chinese government make it a security risk in this country, will still sell other products in the United States, but will look for more welcoming markets like Europe for its telecom equipment.

Political Problems

In a 2 December interview with French journalists, Huawei founder and CEO Ren Zhengfei said his company has been caught in the middle of a political skirmish between the United States and China, and that if Huawei’s business in the United States causes problems between the two countries, it’s “not worth it.”

Mr. Ren Huawei in New Zealand-According to a Chinese transcript of the interview, Ren said Huawei is a “private enterprise” that “does not have any high political position.” However, the company has become part of the back-and-forth between the two countries, “so we decided to exit the US market [and] no longer [be] caught in the middle.”

However, the decision to stop selling telecommunications equipment in the United States apparently won’t impact efforts to move other technology products. In the interview, Ren said there shouldn’t be any security concerns about the mobile phones Huawei is selling “because the software is American, not ours. We do not have the operating system.”

In addition, according to Jane Li, chief operating officer of Huawei Enterprise USA, the CEO’s decision will not impact what her business is doing.

“Our go-to-market strategy in the US for the enterprise business remains unchanged, and we are fully behind our customers, partners and channels,” Li said in an email statement to eWEEK.

Huawei opened the US enterprise business in 2011 in an effort to gain traction in the United States for a range of corporate technology, from servers to storage devices to network appliances. Last month, for the first time, Huawei had a presence at the SC ’13 supercomputing show in Denver, where the company demonstrated various systems and introduced a blade server and storage appliances aimed at the high-performance computing (HPC) market.

Long Expected

The CEO’s statements were not the first time a Huawei executive this year talked about pulling out of the US market. During an analyst conference in April, Eric Xu, Huawei executive vice president and one of Huawei’s rotating CEOs, said the company was dropping its efforts in the United States.

“We are not interested in the US market anymore,” Xu reportedly said in response to a question. “Generally speaking, it’s not a market that we pay much attention to.”

The statement came after months of US lawmakers voicing concerns about what they said are close ties between the Chinese government, Huawei and ZTE, another Chinese tech company. The politicians worried that the vendors’ telecom equipment, including networking hardware like switches and routers, could be leveraged by the Chinese government to spy on the US government, businesses or people or to launch cyber-attacks. A congressional report in October 2012 reiterated those concerns and cautioned US telecoms about buying Huawei and ZTE equipment.

Executives with Huawei and ZTE and Chinese government officials all denied any allegations regarding security.

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Originally published on eWeek.