China’s Huawei is one of the largest makers of telecommunications equipment in the world—second only to Ericsson—and the company has been in the news lately for suing Motorola over a business sale that would potentially see Huawei proprietary information getting handed over to Nokia Siemens. However, Huawei had also been working to acquire the networking assets of Santa Clara-based 3Leaf Systems: the companies believed they had an acquisition deal in place back in mid-2010, but Huawei recently backed out of the arrangement after the federal Committee on Foreign Investment in the United States raised “security concerns” about a Chinese company purchasing a U.S. networking technology. The aborted 3Leaf deal isn’t the first time Huawei has been prevented from making major investments in the U.S. market: Huawei also encountered resistance when it bid on some of Motorola’s assets, tried to ink a deal for networking gear with Sprint Nextel, and tried to buy a stake in telecommunications firm 3Com.
Now, in a very unusual move, Huawei USA’s chairman Ken Hu has posted an open letter defending the company’s reputation and refuting nebulous allegations that the company receives financial support from the Chinese government, has close ties with the Chinese military, does not respect intellectual property law, and somehow represents a security threat to the United States. “These falsehoods have had a significant and negative impact on our business activity and, as such, they must be addressed as part of our effort to correct the record,” Hu wrote.
The letter individually refutes each set of “falsehoods” the company has encountered trying to do business in the United States. Hauwei maintains that the company operates transparently and says the company is “open to any investigation” United States authorities want to conduct to alleviate any concerns. “We have faith in the fairness and justness of the United States and we believe the results of any thorough government investigation will prove that Huawei is a normal commercial institution and nothing more.”
Huawei has been trying to boost its presence in the American market for a decade, and operates research facilities in Texas and Silicon Valley. U.S. networking operators have expressed interest in Huawei’s competitively-priced equipment, and the company has developed major businesses in Europe, the Middle East, and Africa. In the United States, Huawei has hired lobbyists and public relations firms in an effort to introduce itself to potential customers as well as lawmakers; however, so far the efforts have met with limited success. Some industry watchers see the call for a formal investigation of the company as a shrewd move: after all, at this point, Huawei has done about all it can to become a significant player in the U.S. telecommunications market through normal business channels.
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