HUAWEI: NO MORE SILENT IN NORTH AMERICA

AsiaInfo Services
03-01-2011
Huawei: No More Silent in North America

SHENZHEN, Mar 01, 2011 (SinoCast Daily Business Beat via COMTEX) -- It has been ten years since 2001, when Huawei Technologies Co., Ltd. forayed into the North American market. Under the pressure of the US government, the Chinese leading telecommunications equipment supplier lately announced to give up the acquisition of 3Leaf Systems.

In May 2010, Huawei spent USD 2 million in acquiring partial assets from 3Leaf. In November 2010, the former submitted the deal to the Committee on Foreign Investment in the United States (CFIUS).

On February 11, 2011, Huawei received a notice from the US government regulator, suggesting the company to withdraw its application for acquiring partial assets from 3Leaf, which was then turned down by the applicant.

According to the regulation of the US, if Huawei refuses to accept the advice, President Barack Obama will make a final ruling within 15 days. Then, five representatives jointly sent a letter to the US government, claiming that the acquisition of Huawei will threaten the country's computer network.

On February 19, Huawei released a statement, saying that it had made a hard decision to accept the advice of the CFIUS and withdraw its application to acquire partial assets from 3Leaf.

Actually, as early as March 2008, Huawei finally gave up the acquisition of 3Com jointly with Bain Capital, which had not passed the examination of the CFIUS as well. Dozens of US representatives and government officials worried that the deal would give Huawei access to the country's military technology.

Usually, Huawei will remain silent to the abjuration of mergers and acquisitions. However, on February 25, many Internet users saw an open letter from the company's vice chairman Ken Hu, enumerating misunderstanding Huawei encountered in the US in the past ten years.

In the letter, the top management of Huawei hopes that the US government could launch investigations into the company to clarify all the doubts. This time, Huawei does not choose to remain silent.

It seems that Huawei is also thinking back to the things that have happened. A top executive of the company points out that they will improve their service, products and public relations in North America next.

In recent years, Huawei and its domestic peer ZTE Corporation (SEHK: 0763 and SZSE: 000063) swept away all obstacles in Europe, Asia, Africa and Latin America. However, they met accidents in North America.

For a long time, Alcatel-Lucent (NYSE: ALU), Nortel Networks Corporation (NYSE: NT) and Motorola Inc. (NYSE: MOT) have been dominating the communications equipment market of North America.

However, Huawei has so far set up 13 offices and eight R&D centers in the region. In the past ten years, its investment in research and development jumped by 66% in the US each year and reached USD 62 million in 2010.

(USD 1 = CNY 6.58)

Source: www.sina.com.cn (March 01, 2011)

KEYWORD: SHENZHEN INDUSTRY KEYWORD: Telecommunications SUBJECT CODE: Telecommunications Equipment
Telecommunications Equipment
SinoCast China Business Daily news
SinoCast China IT Watch
North America
US
acquisition
Barack Obama
government

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