Light Reading
Huawei once more faces opposition in Washington to its business with an important US ally, South Korea.

US Senators Stir Up Huawei Security Concerns

Robert Clark
News Analysis
Robert Clark
12/5/2013
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Senior US lawmakers are once again raising security concerns about the deployment of Huawei equipment in communications networks, but this time the focus of their concerns is across the Pacific Ocean and relates to a contract to supply 4G LTE radio access network gear to South Korean operator LG Uplus.

In a letter leaked to several Washington news bureaux, Senator Robert Menendez, chairman of the Senate Foreign Relations Committee, and Senator Dianne Feinstein, chairwoman of the Senate Intelligence Committee, have said the deal undermines the US alliance with South Korea.

"Maintaining the integrity of telecommunications infrastructure is critical to the operational effectiveness of this important security alliance," they noted in a November 27 letter to Secretary of Defense Chuck Hagel, Secretary of State John Kerry and James Clapper, President Barack Obama's Director of National Intelligence.

US officials reportedly told the Wall Street Journal they were concerned about close security partners such as South Korea integrating Huawei into their national telecom networks, especially given the number of US troops deployed there.

"This is their IT infrastructure. There isn't really a role for the US government to necessarily advise them. But our concerns are significant enough that we wanted to make sure that they know what we know," an unnamed official said.

Huawei's response displays a modicum of frustration. "We cannot see any justification for these groundless, false claims, which we have seen several times before. We are concerned about such comments interfering in the ongoing business activities of Huawei and our customers," said a Huawei spokesman in an email to Light Reading.

Political theater?
However, the letter may be more about political theater. It comes from Congress, not the White House, and the leak appears to have been timed to put maximum pressure on Vice President Biden, who has been holding key talks in Tokyo and Beijing this week over China's newly declared air defense zone in the East China Sea.

There's no suggestion that the Obama administration plans to directly challenge the LG Uplus contract, just as it has not challenged Huawei's role as a supplier to SoftBank Corp. in Japan (See Unknown Document 705875.)

If the situation escalates, however, it may raise questions over Huawei's role in the markets of other US allies such as Australia, where, although excluded from the NBN (national broadband network), Huawei has been told it can bid for 4G contracts. (See Australian Govt Confirms Huawei Ban.)

Huawei confirmed earlier this year it was exiting the US market, having been blocked in its attempt acquisition of 3Com and warned it would not be allowed to win major wireless contracts. (See Huawei Gives Up on US Telecom.)

LG Uplus, the smallest South Korean operator, last month tapped Huawei, Samsung, Ericsson-LG, and NSN to build its LTE network. The company said that Huawei's involvement presented no risk because its "mobile networks are managed directly by LG Uplus officials."

Lee Dong-ho, a telecom official in the Korean Ministry of Science, ICT and Future Planning, told Reuters that Huawei was providing equipment in accordance with local regulations, and the ministry had systems in place to monitor security breaches. He added that the Ministry had no plans to look into the Huawei deal.

Robert Clark, contributing editor, special to Light Reading

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MordyK
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MordyK,
User Rank: Light Sabre
12/14/2013 | 12:31:19 AM
Re: Isolationism
Well said Medyk, although one can argue that the US is already isolated although allies and other countries play along due to our economic & military power, but with China becoming more influential economically that hold is already fraying.
R Clark
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R Clark,
User Rank: Blogger
12/5/2013 | 8:08:45 PM
Re: US exit
They're definitely not exiting the US handset market, and I think they still have contracts with some smaller operators that they need to support. So there will be a continued Huawei presence but they've officially given up on the carrier and enterprise market.
mendyk
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mendyk,
User Rank: Light Sabre
12/5/2013 | 5:48:19 PM
Isolationism
If the U.S. starts redlining national networks that include Huawei equipment, it could end up being as isolated as ... North Korea.
KBode
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KBode,
User Rank: Light Sabre
12/5/2013 | 11:44:35 AM
Entire Huawei Spying Affair Has Been Rather Silly
There is so much theater here it's hard to know where to start. I don't think I've seen one bit of actual hard evidence of Huawei spying, even though the government conducted a 14 month investigation into it. Also, the Washington Post in 2012 strongly suggested a lot of the spying whisper campaigns were originating with Cisco.

That's not to saying Huawei isn't spying, but the company just announced they were effectively giving up on U.S. markets. Factoring in our credibility regarding the entire Snowden affair, our repeated accusations come out as protectionist, nationalist, hypocritical and just kind of silly.

It really seems to come down to Cisco and others paying Congress to keep a competitor out of the U.S. market, since they're all likely cooperating with intelligence agencies of one stripe or another.
DOShea
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DOShea,
User Rank: Blogger
12/5/2013 | 11:03:01 AM
US exit
Have they officially exited the US market? This is something we've been hearing a lot about, and we've seen Ren Zhengfei make some enigmatic statements (the mystery aided by possibly imprecise translation), but where does this stand in terms of having offices and people in the US and/or having conversations with potential customers?
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