Huawei Dampens Deal Talk

Huawei Technologies Co. Ltd. is now distancing itself from reports in the Chinese press that it was pursuing North American partnerships with Lucent Technologies Inc. (NYSE: LU) and Nortel Networks Ltd. (NYSE/Toronto: NT).

"The article published in China Daily, contained several misinterpretations," says Susan Etlinger, a spokeswoman for Huawei, in a statement emailed to Light Reading on Thursday.

However, the company won't say what exactly was misinterpreted, leaving it anyone's guess. Maybe a company executive just said too much. Maybe Huawei's words were lost in translation.

This all started when, earlier in the week, China Daily, a Beijing-based daily newspaper that is published by London's Financial Times, quoted a Huawei executive as saying the company has already spoken with Lucent and Nortel and wants a partnership in North America (see Report: Huawei Talking to Lucent, Nortel).

"We are talking with telecom equipment makers such as Lucent and Nortel Networks this year to further our partnerships so as to better position ourselves," Zheng Baoyong, executive vice president of Huawei, was quoted as saying in China Daily.

The article made the rounds quickly, primarily because its premise isn't far-fetched. Huawei has already struck a partnership with Marconi Corp. plc (Nasdaq: MRCIY; London: MONI), a deal that has given the vendor deeper penetration into Western Europe (see Marconi Hitches a Ride With Huawei). It's also collaborating with Siemens Communications Group in the enterprise market (see Siemens and Huawei Edge Closer).

This isn't the first time that stories about Huawei looking for a North American partner have circulated (see Huawei on the Hunt). Similarly, speculation about Huawei staging an IPO surfaces periodically (see ...and East Looks West, Huawei's US Aspirations on Hold, Is Huawei Edging Closer to IPO?, and LR Tags Top IPO Candidates).

Huawei has been making moves of its own in recent months, expanding in North America. It has about 24,000 workers in 55 offices worldwide.

In the U.S., the company says there are roughly 60 people working at its Futurewei subsidiary in Richardson, Texas, with about 80 workers at offices in San Diego and Santa Clara, Calif. Huawei says about 60 percent of its employees in the U.S. are local hires.

It is noteworthy that, given the opportunity, Huawei didn't deny that it had talked to Lucent and Nortel. It won't, however, get specific as to the substance of any conversations it may have had.

"Huawei does not comment on potential business strategies," states Huawei, via Etlinger. "As part of our ongoing business, we communicate regularly with a number of industry players. Our primary focus is on growing our business both in China and globally."

— Phil Harvey, News Editor, Light Reading

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