Are Huawei & ZTE About to Feel a Thaw in the Comms Cold War?

A change of administration in Washington could signal fresh opportunities in the US for Huawei & ZTE.

Dan Jones, Mobile Editor

January 28, 2016

3 Min Read
Are Huawei & ZTE About to Feel a Thaw in the Comms Cold War?

Chinese vendors Huawei and ZTE appear to be slowly expanding in the US, possibly in anticipation of a more friendly administration arriving in Washington, D.C. by next year.

Huawei Technologies Co. Ltd. and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) have been networking pariahs in the US for major operators since October 2012, when both companies were named as a security risk by the US House Permanent Select Committee on Intelligence. Naturally, both companies have repeatedly denied that they pose any risk. (See US vs Huawei/ZTE: The Verdict and China Lashes Out at 'Cold War Mentality'.)

Some industry insiders, however, suspect that a Hillary Clinton administration, in particular, could be more friendly to the vendors than the Obama government has been. In addition, Republican congressman Mike Rogers, who chaired the US House Permanent Select Committee on Intelligence committee during the Huawei/ZTE spat -- and was a vocal advocate for restrictions on the vendors in the US -- left government in 2015, and now works for CNN and others. (See Surprise! Sprint Still Has Huawei in Its Network.)

Of course, if Donald Trump takes the presidency then all bets are off!

Huawei's VP of External Affairs, Bill Plummer, wouldn't be directly drawn on the future prospects for Huawei on in the US, while noting the borderless, interconnected nature of the communications is much better recognized today than it was even in 2012.

"There's a far more mature understanding of the ICT industry than there was mere years ago," he tells me.

Huawei is slowly but steadily adding staff in the US. The company is already said to have around 700 staff at an R&D center in Silicon Valley and it currently has more than 300 jobs open across the US. Some of the open positions appear to suggest carrier interaction, like a Radio Network Planning and Optimization Senior Engineer in Miami. Others, meanwhile, are more future-orientated, like the 11 open 5G-related jobs in California and New Jersey.

Trials of 5G capabilities in the US from most major carriers should dovetail nicely with the changing of the guard in the Capitol in 2017. Huawei, in particular, has invested $500 million so far in 5G and is positioning itself as leader in that space. (See Huawei CEO Pledges 5G R&D Investment.)

For its part, ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) is currently for advertising sales positions "to support our rapid expansion in the US market," particularly focusing on regional operators and wireless Internet service providers. ZTE recently added Rick Talbot -- lately an optical infrastructue analyst at Current Analysis -- as Technical Presales Director at ZTE USA.

For more on 5G, visit the 5G section here on Light Reading.

For US carriers, the pressure to decrease capital expenditure (capex) on deploying networks could also make Huawei and ZTE more attractive, especially at operators that need to make every dollar count. Sprint Corp. (NYSE: S), for instance, is setting up a new entity to help finance its LTE network deployment. This is expected to raise up to $5 billion, which, at current spending rates, would account for just about a year's worth of capex spending for the operator, which as we know hasn't quite cut its historical ties with Huawei. (See Sprint Setting Up New Entity to Fund Network.)

So, if the US government's attitude about the Chinese vendors gets more amicable with a fresh administration, Huawei might even be a 5G contender for Sprint. Particularly as the SoftBank Corp. engineers that (I'm told) are driving a lot of Sprint's new thinking on network design and implementation are already very familiar with Huawei equipment. (See Huawei Launches TDD+ With China Mobile, SoftBank.)

— Dan Jones, Mobile Editor, Light Reading

About the Author(s)

Dan Jones

Mobile Editor

Dan is to hats what Will.I.Am is to ridiculous eyewear. Fedora, trilby, tam-o-shanter -- all have graced the Jones pate during his career as the go-to purveyor of mobile essentials.

But hey, Dan is so much more than 4G maps and state-of-the-art headgear. Before joining the Light Reading team in 2002 he was an award-winning cult hit on Broadway (with four 'Toni' awards, two 'Emma' gongs and a 'Brian' to his name) with his one-man show, "Dan Sings the Show Tunes."

His perfectly crafted blogs, falling under the "Jonestown" banner, have been compared to the works of Chekhov. But only by Dan.

He lives in Brooklyn with cats.

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