Home & Office

Huawei plugs away in US despite cold shoulder

The Chinese firm, blocked by US authorities from bidding on a large government contract, has acknowledged it faces hurdles breaking into the US market, though it sees this as 'just a question of time'
Written by Jack Clark, Contributor

Chinese telecommunications specialist Huawei has admitted it faces hurdles in getting its equipment into US infrastructure, weeks after opening a dedicated enterprise business unit in the US.

Huawei China allegations

An executive at Huawei has admitted that the Chinese firm faces hurdles in doing business in the US. Photo credit: David Meyer

The Shenzen-based networking specialist has seen success in the UK; it is a major supplier to BT and has pledged to make Europe its "second headquarters" after China. But it has repeatedly run into problems in the US, with the government there blocking it on multiple occasions from acquiring US companies or bidding on large, lucrative contracts.

"There are some parts of the US telecommunications industry that it will be difficult for us to enter," Ron Raffensperger, the company's director of cloud computing marketing, told ZDNet UK at Storage Network World Europe on Wednesday. "There are other parts that are much more straightforward."

US enterprise business unit

The company launched a dedicated US enterprise business unit on 5 October. The unit is intended help Huawei sell telecommunications equipment along with server, storage and other cloud-related bits of kit to US companies.

In an admission to the difficulty Huawei has with selling to the US government, Ruffenberger said he does not think it will set up a dedicated US government division. "I don't see Huawei doing that," he said.

There are some parts of the US telecommunications industry that it will be difficult for us to enter.
– Ron Raffensperger, Huawei

In October, the US Department of Commerce told the company it had been excluded from bidding to help construct the US national wireless network for emergency responders, due to security concerns. The year before, Huawei was blocked from helping to modernise Sprint Telecom's network due, again, to security concerns voiced by officials. Huawei has historically had to fend off allegations that it has deep links with the Chinese military.

Raffensperger thinks Huawei breaking into the US is "just a question of time" but concedes there are some places that are likely to stay off limits. These areas are "the core switching kind of things for large [telecommunication] operators," he said.

The company has sought to allay security concerns in the UK by creating a GCHQ-monitored equipment testing centre in Banbury. However, the US has continued to view the company with suspicion. In February, the US Committee of Foreign Investment blocked its attempt to take over Californian server company 3Leaf Systems.

Success in mobile

There are some bright spots, however. The company has seen success in the US in mobile devices — AT&T sells its phones — and with some smaller telecommunications companies.

"Second- and third-tier operators are using our radio equipment," Raffensperger said. "I'm convinced we can be successful in selling our IT product capabilities in normal private [US] businesses."

At the moment, Huawei is seeking to become a "solutions" company, known for "something other than the 3G dongle", he added.

Like other vendors, it is trying to sell more and more integrated hardware packages. It is beginning to tentatively deploy private cloud packages — software and hardware to support a storage and compute infrastructure on a network — to some customers.

Huawei has set up fewer than 12 private clouds, with the majority in China, Raffensperger said. It hopes to broaden out in the future, with Europe and, to a lesser extent, the UK a focus. "By the end of next year, you'll see 65 percent of the cloud stuff outside of China," he said.

Get the latest technology news and analysis, blogs and reviewsdelivered directly to your inbox with ="http:>ZDNet UK'snewsletters.
Editorial standards