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Huawei Gives Up on US Telecom

Craig Matsumoto
News Analysis
Craig Matsumoto
4/23/2013
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Huawei Technologies Co. Ltd. has officially given up on the U.S. telco market -- or, at least, that's what is implied by the literal wording of one executive's "exasperation." "We are not interested in the U.S. market anymore. Generally speaking, it's not a market that we pay much attention to," said Eric Xu, a Huawei executive vice president, as quoted by Reuters. Xu, speaking at Huawei's annual analyst event in Shenzhen, China, was responding to a question about last year's congressional report that pegged Huawei and ZTE as security risks for U.S. companies. The Financial Times took the statement at face value, while Reuters left room for the possibility that Xu was just being a bit dramatic. Xu's statement doesn't appear to apply to the handset market, where Huawei assumedly still has high hopes in the United States. Reuters reported that Xu didn't respond to a question about that. Why this matters
The U.S. government has made it clear that Huawei's equipment won't be allowed in AT&T or Verizon networks -- which would relegate Huawei and ZTE bit players, at best, in U.S. telecom. For Huawei to give up on the U.S. telecom market, then, would make a lot of sense. Saying so out loud seems a little unusual but is hardly surprising. For more

— Craig Matsumoto, Managing Editor, Light Reading
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Gene Jaleski
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Gene Jaleski,
User Rank: Light Beer
4/25/2013 | 7:16:39 PM
re: Huawei Gives Up on US Telecom
As usual the big Corps screw the US backward cellular system, while keeping competition out and user costs high. Uncle Sam should be on trial for financial rape of it's own people.
upand2theright
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upand2theright,
User Rank: Light Beer
4/24/2013 | 8:20:17 PM
re: Huawei Gives Up on US Telecom
Hmmm ... Without politics and security concerns, I also see no reason why Northern Ireland can't be joined with Republic of Ireland, Palestine can't merge with Israel, and Taiwan can't be integrated with mainland China. -áC'mon Ray-á
Ray Le Maistre
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Ray Le Maistre,
User Rank: Light Sabre
4/24/2013 | 8:20:10 AM
re: Huawei Gives Up on US Telecom
On the other hand.... Ericsson's Q1 results today show that it generated revenues of $2.4 billion from North America (mainly USA) in the first three monmths of this year, so that's a run rate of nearly $10 billion in a year. Huawei is challenging Ericsson globally, so under level playing field conditions there would be no reason why Huawei could not build a business worth billions of dollars per year in North AMerica (without handset sales) -- that's what Huawei has been chasing.
Without the politics and security concerns I see no reason why Huawei would not have been a significant player in N American networks sector. It's no surprise it feels it can put its resources to better use elsewhere.
chuckj
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chuckj,
User Rank: Light Sabre
4/24/2013 | 2:04:09 AM
re: Huawei Gives Up on US Telecom
This has nothing to do with the U.S. Government posturings, it is just common sense. How much is the total annual telco capex? $60, $80 billion? -áhow much of that is actually for hardware? $20, $30 billion? -áHow many suppliers are there? -á6, 7, 8, 9? -áIs there a sense of urgency with any of the carriers to upgrade their network? -á Are the carriers the kind of customers who take hardware with no fuss without a long-áqualification-ácycle, without demands for-áfree $million hardware samples?

There are folks in the US who run rural operations and they will buy from huawei and they are far better customers than the Telco's, all the while the Telco suppliers are too busy fighting each other on being short listed on RFQs that take two years to come to fruition, most of which don't.
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