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macster 12/5/2012 | 3:44:09 PM
re: Heavy Reading Homes In on Huawei First to market can be an advantage. HW needs to do some innovation to illustrate that it can lead in some areas.

HW's growth is impressive! What I'd like to see is yearly margins, and the impact of UK/EU expansion on these margins.

Some Indian IT companies have decided to relocate to Malaysia and Singapore, citing lower operating costs and better infrastructure. China has good infrastructure. China has a vastly improved standard of living. With this, comes a higher cost of living (e.g. meat produce, etc. shortage and high prices) and higher wages. Or does the sheer number of ppl in China keep salaries stagnated?

HW has a high attrition rate. They need to be able to retain their key (non-Chinese) ppl.

eurichardson 12/5/2012 | 3:44:08 PM
re: Heavy Reading Homes In on Huawei Ren Zhengfei, a former People's Liberation Army soldier, founded Huawei in 1988. The Govt of China has full control over this company. Make no mistake about this.
It is scary that Vodafone and other major European operators are planning to deploy key elements in their network from Huawei, instead of from well-established vendors such as Ericsson, NSN, Alcatel-Lucent, Nortel, etc.
eurichardson 12/5/2012 | 3:44:07 PM
re: Heavy Reading Homes In on Huawei
Here's an excerpt from the Washington Post dated Jan 6, 2008 that you will find interesting:

Fueling US lawmakers' unease about the Huawei deal (to acquire 3Com) is that no one knows exactly who owns it. Technically, Huawei is a private venture, not state-owned. But the company won't reveal information about its shareholders except to say it's "100 percent employee-owned," with its chief executive owning 1 percent.

"There is an opaqueness in the relationships between Huawei and many of these Chinese government entities. You'll never know what has gone back between them," said Rep. Thaddeus McCotter (R-Mich.), chairman of the House Republican Policy Committee, who has called on the Bush administration to block the deal.

Research organization Rand Corp. said that Huawei has "deep ties" with the Chinese military. It is not only a customer of Huawei's, Rand said in an analysis prepared for the U.S. government, but also was a "political patron and research and development partner."
Stefan Sip 12/5/2012 | 3:44:07 PM
re: Heavy Reading Homes In on Huawei It is a well known fact that China Unicom was partially backed by the Chinese miltary/industrial complex. Given eurichardson's strong belief that Huawei is back by the Chinese miltary as well, it would only be logical for Huawei to be the #1 or #2 or even #3 vendor to Unicom. The last time I checked, Huawei has almost zero share of Unicom's CDMA infrastructure.

One can argue that this is simply a way for Huawei/China/Chinese miltary to confuse foreigners in thinking Huawei has nothing to do with the miltary.

Look, other than Ren being ex-miltary, what other evidence are there that Huawei is controlled by the government or the miltary.

On the other hand, ZTE has always made it clear that they are partially owned by the government. It is reflected in their organization and culture.
NoCopper 12/5/2012 | 3:44:07 PM
re: Heavy Reading Homes In on Huawei Sometimes its just the fact that Huawei is a privately owned company that does not need to comply to GAAP and SOX rules, which gives them some degree of freedom that the established vendors don't have in their quotations. Just think of the endless discussions around roadmap commitments and resulting revenue recognition issues; fair value; service versus hardware pricing and so on.....

Sad enough that its the SOX compliant service providers who welcome this flexibility from the private vendors most.
Stefan Sip 12/5/2012 | 3:44:06 PM
re: Heavy Reading Homes In on Huawei Okay, let's try this again.

Huawei 3Com has been a successful JV for the past 3+ years without any political issues. It is interesting that now in 2008 when politicans want to get re-elected, Mexicans and Chinese are front and center again.

I am still waiting for some tangible evidence of a close connection.

I am still waiting on a plausible explanation on why Huawei doesn't sell into Unicom, since both are miltary.
douaibei 12/5/2012 | 3:44:06 PM
re: Heavy Reading Homes In on Huawei Couple of years ago Huawei came to a joint venture with 3com whcih now is named h3c.

Huawei has strict policy and contract restriction in North america market, Cisco imposed some preferred term when they sign the a memo regarding the IPR issue between huawei and cisco.

Huawei need another anchor to help break into north america market especially in IP/Routing marketing. huawei already sold optical, wireless, terminal equipment in north america, but zero for IP/Routing equipment which US is the larget market.

Huawei did accept some government support but I believe all company have relation with govenment like cisco and FBI, ALcalel with French government. microsoft with FBI etc.

I dont think it's wise for us government to ban the deal between huawei and 3com which just mean 3com will definitely die in the states with the help of huawei.

H3C is fully owned by 3com, they are doing very well in Asia Pac. and most of 3com business come from H3C. A joint effort will be good for huawei and 3com, otherwise I do believe huawei will launch the competitive product line by the end of the protection term which is due to end this year.

then H3C and 3com will be the big loser.

but huawei still need some time to fully catch
up with 3com/h3c even if they already got harbor network technology.

chechaco 12/5/2012 | 3:44:04 PM
re: Heavy Reading Homes In on Huawei "H3C is fully owned by 3com"
Not exactly. H3C is controlled by 3Com which has 51% of H3C for about two years now. Originally 3Com had only 49% and bought controlling 2% from Huawei. Note, that security product of 3Com is not part of H3C business now but would become accessible to Huawei if joint Bain/Huawei privatization went through.
eurichardson 12/5/2012 | 3:44:03 PM
re: Heavy Reading Homes In on Huawei
Read the Rand Report, starting at Page 246, for more details.

Regarding an explanation on why Huawei doesn't sell to Unicom, here's a press release issued by Huawei:
Huawei Wins CDMA Network Contract with China Unicom
[Beijing, China, 25 February 2008] Huawei Technologies ("Huawei"), a leader in providing next generation telecommunications network solutions for operators around the world, announced that it has been recently selected by China Unicom, a leading service provider in China, to deploy and upgrade its CDMA network involving more than 1600 carrier frequencies. The network covers Tianjin City in North China.
Light-bulb 12/5/2012 | 3:44:03 PM
re: Heavy Reading Homes In on Huawei Keep in mind these are all my own personal opinion...

The Chinese Government are actively involved in acquiring US secrets...

The Chinese Government have stated that It will continue to utilize information technology to help with intelligence gathering and utilizes Loyal Chinese by brute leverage to achieve this goal. As evidenced by several scientists who've had their families exploited or living in camps to help "Motivate" individuals to give secrets to their government.

The Chinese can give a crap about copyright, patents, royalites, etc...

Now why would The US government, or UK government, or any government who sees the risks involved with giving a Chinese company control of devices such as Firewalls and other security devices from 3com?, care? Hmm, I guess I'm just clueless here.

As to whether or not Huawei has "Ties" to the government... in my opinion the complete Chinese government approach signifies that the government DOES have involvement with the company. As unless I'm vastly lost, a Communist government means common ownership. Yes I've heard the Chinese are touting their new economic zones that promise free markets... but I certainly don't buy it. Moreover because of their government that can CHANGE at any time!

Huawei should have never been allowed into the US in my opinion. But through JVs they still mange to get in. The company is corrupt, they steal, they copy, they try to buy Infrared cameras, and other devices to reverse engineer ASICS and other intellectual property, because they have a "Lower R&D" cost... yes because they don't innovate, they steal...

Anyway clearly I don't trust the Chinese, but I'm just stating my observations over the last decade.
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