AT&T Warned to Cut Ties With Huawei – Report

US operator is reportedly told to sever ties with Chinese equipment supplier.

Iain Morris, International Editor

January 17, 2018

3 Min Read
AT&T Warned to Cut Ties With Huawei – Report

AT&T has come under pressure from US authorities citing national security concerns to cut ties with China's Huawei, according to a report from Reuters.

That same report also suggests that US senators oppose plans by China Mobile to operate and offer services in the US and want US firms to avoid having commercial ties with the Chinese operator.

US officials reportedly leaned on AT&T Inc. (NYSE: T) to call off its negotiations with Huawei Technologies Co. Ltd. concerning a smartphone distribution deal, sources apparently told Reuters.

That deal was revealed to have fallen apart last week. (See Huawei Still Knocking on US Door – but AT&T Deal Thwarted.)

US companies have now been told they could lose out on government contracts if they continue to maintain ties with Huawei or China Mobile, the country's biggest operator, reported Reuters, citing a congressional aide.

China Mobile Communications Corp. is said to have applied for a license to do business in the US in 2011. That application is still with the US Federal Communications Commission, according to Reuters.

Policymakers have also urged AT&T to stop collaborating with Huawei over 5G standards, aides are said to have told Reuters.

The news comes after US Congressman Michael Conaway earlier this week proposed new legislation that would bar Huawei and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763), China's two biggest telecom equipment vendors, from selling any products or services to the US government. (See Huawei, ZTE Face US Federal Ban.)

Such legislation could prevent the Chinese vendors from having any dealings with AT&T or other US operators that cater to the US government.

Service providers including AT&T, Verizon Communications Inc. (NYSE: VZ), Sprint Corp. (NYSE: S) and T-Mobile US Inc. have been warned off using Huawei and ZTE since 2012, when a US government report described the Chinese companies as a potential security threat because of their alleged close links with the Chinese government.

In that report, policymakers said their concern was that Chinese authorities could use Huawei and ZTE products to spy on the US.

Conaway echoed those concerns in a strongly worded statement about his legislative proposal, arguing the security risk from China was growing. "The threat receded after the release of an incriminating HPSCI [House Permanent Select Committee on Intelligence] report, but it is now re-emerging as the Chinese government is re-attempting to embed themselves into US technology," he wrote on his website.

For all the latest news from the wireless networking and services sector, check out our dedicated mobile content channel here on Light Reading.

Critics have said the security concerns are a smokescreen for protectionism. President Donald Trump previously said that trade with China and other countries has come at the expense of American jobs. He has even threatened to impose new tariffs on goods the US imports from China.

In his statement, Conaway said his legislative proposal was "in line with President Trump's policy of putting American national security interests first."

Huawei emailed the following statement to Light Reading when asked for a response to the latest reports and legislative proposals: "Huawei has a robust system of cyber security assurance and a proven track record. Our products and solutions are used by major carriers, Fortune 500 companies, and hundreds of millions of consumers in more than 170 countries around the world. We have earned the trust of our partners across the global value chain. Huawei has no expectations of doing business with the US government, so such provisions would have no effect on us."

— Iain Morris, News Editor, Light Reading

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About the Author(s)

Iain Morris

International Editor, Light Reading

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

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