updated 02:54 pm EDT, Wed October 17, 2012
Huawei expects no impact, says investigation flawed
Chinese telecommunications manufacturer Huawei doesn't expect that a US congressional probe into its operations will have much of an impact on its business in other overseas markets. This according to Huawei's Senior Vice President Zhang Chunxiang, who characterized the House Intelligence Committee's investigation of Huawei as flawed and incomplete and indicative of growing US trade protectionism.
Huawei and ZTE, another Chinese telecom manufacturer, have been under investigation by the House Intelligence Committee, which is examining the two companies' ties to the Chinese Communist Party under the belief that they might be involved to some extent in espionage. The two companies have denied such allegations, but recent days have seen new allegations emerging from former clients and employees at the two firms.
The US investigation, according to Reuters, has sparked similar suspicions in Canada and Britain. Chunxiang, though, doesn't believe this suspicion will significantly impact the business Huawei does in these and other countries.
The US market accounts for only single-digit percentages of both Huawei and ZTE's overall revenues, and that mostly from mobile phone sales. Huawei has been looking to expand its operations in the US market, though, hoping to sell US carriers more telecommunications equipment. The company has been stymied, though, by the recent investigation, which warned carriers and others against Huawei's services and products.
ZTE, meanwhile, has been feeling negative impacts from US suspicion. That company is under investigation by the FBI for alleged sales of embargoed equipment to Iran. The investigation, along with the soft global economy, contributed to ZTE posting a $279 million loss for the first three quarters of this year.