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Regulation

US Probe Into Huawei Threatens Trade War

In signs of escalating trade tension with China, US officials are demanding that Huawei turn over information about shipments to Cuba, Iran, North Korea, Sudan and Syria that may have included components from Huawei's US suppliers.

A subpoena seen by the New York Times appears to form part of an investigation into whether Huawei Technologies Co. Ltd. broke US export rules.

That investigation comes after the US recently blocked sales of US products to ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763), Huawei's smaller Chinese rival, and will fuel concern about a full-blown trade war between the US and China. (See ZTE CEO to Quit in US Export-Ban Dispute.)

Huawei is already effectively locked out of major opportunities in the vast US market, where officials that deem it to be a security risk have pressured the biggest carriers to buy their network equipment elsewhere.

According to the New York Times report, officials want Huawei to provide information about shipments to blacklisted countries over the past five years.

Further action against Huawei could meet with a backlash from China and have repercussions for companies that do business with the equipment maker globally.

The move could also hurt US suppliers to Huawei, including Lumentum Holdings Inc. , Finisar Corp. (Nasdaq: FNSR) and NeoPhotonics Corp. (NYSE: NPTN), according to Simon Leopold, an analyst at Raymond James & Associates.

"Companies with China exposure could face a less receptive environment in retaliation, including Cisco, which generates a low single digit percent of sales from China," writes Leopold in a research note.


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


Leopold believes there is currently more risk to component suppliers than systems companies but says a trade war could "affect many" organizations.

Huawei last year overtook Ericsson AB (Nasdaq: ERIC) to become the world's biggest supplier of network equipment to communications service providers in terms of sales. (See Huawei's Carrier Division Set to Dwarf Ericsson by 2018.)

Despite its situation in the US, Huawei now caters to a number of the biggest telcos in Europe, Africa, Latin America and across Asia, where it has benefited in particular from a 4G boom in the Chinese market in recent times.

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

ITProjec39942 10/10/2016 | 1:11:51 AM
officials want Huawei to provide information about shipments to blacklisted i agree,According to the New York Times report, officials want Huawei to provide information about shipments to blacklisted countries over the past five years.

Further action against Huawei could meet with a backlash from China and have repercussions for companies that do business with the equipment maker globally.

The move could also hurt US suppliers to Huawei, including Lumentum Holdings Inc. , Finisar Corp. (Nasdaq: FNSR) and NeoPhotonics Corp. (NYSE: NPTN), according to Simon Leopold, an analyst at Raymond James & Associates.
I disagree with your entire premise. Verizon is paying its bandung content providers to provide content jogja on its FiOS TV network. I am assuming SBC will pay its content providers to provide video over Lightspeed.

Google is not a content provider, but semarang more of a content aggregator. A way of finding actual content. The Google Business bekasi model is to be paid by content providers to be found through Google.

Example, you can "google" Light Reading bogor and find this site. But Light Reading is the content and not Google.

From that cikarang standpoint, the RBOC argument over QoS and making people pay for access to their customers is really a way to charge cirebon their customers more money. As at the jakarta end of the day businesses would pay Google more for karawang ads and in turn charge their customers more. If a click-fraud application comes around in that time, then Google will surabaya be out of the pay-per-click business.

ISPs are also not content providers but common carriers.

 
sowen557 6/4/2016 | 4:49:12 PM
Re: Relax, folks. "shipments to Cuba, Iran, North Korea, Sudan and Syria that may have included components from Huawei's US suppliers."  Who else would supply them Telecom and ICT Equipment to these markets?
mendyk 6/3/2016 | 9:12:07 AM
Re: Relax, folks. The New World Order is turning out to be not so different from the Old World Order.
PaulERainford 6/3/2016 | 8:03:46 AM
Relax, folks. It's OK, The Donald will smooth things over when he takes charge. Yikes.
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