Monday, 10 December, 2018

China warns of United States protectionism after Huawei setback

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Kayla Schwartz | 13 January, 2018, 03:33

LAS VEGAS-The end of a rumored deal to sell Huawei phones through AT&T doesn't just hurt the Chinese company's plans for the U.S. market.

AT&T reportedly pulled out of the deal under pressure from United States lawmakers who wrote to the FCC citing concerns "about Chinese espionage in general, and Huawei's role in that espionage in particular". The letter also cited apprehension regarding a pending deal between Huawei and an unnamed American telecommunications company. AT&T is the second-biggest carrier in the USA, and the collapse of the deal essentially shuts Huawei out of the United States smartphone market.

Regardless of the reasons why AT&T would not support them, the Mate 10 and Mate 10 Pro are capable flagship phones.

A second deal with Verizon is looking unlikely, with the carrier also under political pressure to cancel a planned summer launch of the Mate 10 Pro, according to Android Police.

Samsung had previously filed a countersuit, also in China, accusing Huawei of infringing 4G-related patents, WIPR reported. It was also anxious about USA carrier deals with the smartphone maker.

Last month, members of the Senate and House intelligence committees sent a letter asking the Federal Communications Commission to review any relationship with Huawei and requested the FCC get briefed on the security concerns raised in 2012.

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It's awkward timing for Huawei, which showed off the Mate 10 Pro at the tech show CES this week. Richard Yu, CEO of Huawei's consumer products division, addressed the void agreement at his CES keynote speech, in which he presented the Mate10 Pro for the US market. More big loss is consumers. It has also made strong inroads in the United Kingdom and is the third-biggest brand behind Samsung and Apple, according to Counterpoint.

According to the Journal, Union Wireless of Mountain View, Wyoming - with 50,000 customers in five Western states - turned to Huawei four years ago after its previous equipment vendor fell behind schedule on a critical network upgrade. But it has never managed to crack the U.S., and the firm will have to rethink its expansion plans after this latest blow. "They need Huawei", he added.

In 2012, Huawei and ZTE Corp (000063.SZ) (0763.HK) were the subject of a US investigation into whether their equipment provided an opportunity for foreign espionage and threatened critical USA infrastructure - a link that Huawei has consistently denied.

Just like last time, Samsung is evaluating its options and hasn't disagreed with the ruling publicly.

Whether Huawei will see the same success in California is anyone's guess.

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