Huawei on U.S. market: Never mind

Huawei Technologies apparently has concluded that the negative perceptions that continue to dog the company in the United States are too well entrenched to overcome. As a result, statements from company executives at an analyst event this week in China indicate Huawei has given up hopes of achieving the same level of success in the U.S. as it has enjoyed elsewhere.

"We are not interested in the U.S. market anymore,” Eric Xu, Huawei executive vice president and one of the company’s rotating CEOs, said during the event, according to numerous media sources (such as Reuters and The Financial Times of London. “Generally speaking, it's not a market that we pay much attention to."

“Long story short, the comment that was made reflects the realities of our carrier network business in the U.S.,” wrote Jannie Luong, senior manager of public relations for Huawei Technologies USA, in an email to Lightwave. “The growth of our carrier network business is primarily from developed markets in other parts of the world. Considering the situation we currently face in the U.S., it would be very difficult for the U.S. market to become a primary revenue source or a key growth area for our carrier network business. Nevertheless, our U.S. employees remain committed to providing quality services for our customers.”

There are no immediate indications that Huawei will significantly reduce its U.S. operations, which are headquartered at Huawei Technologies USA in Texas. However, press reports suggest that Huawei has already reduced headcount in the U.S. from its peak.

U.S. politicians and industry participants became increasingly suspicious of Huawei and other Chinese communications equipment suppliers as they achieved success in the world market and arrived on U.S. shores. These concerns peaked last year, when a House Intelligence Committee investigation concluded that Huawei and fellow Chinese communications equipment provider ZTE Corp. represent security threats and, at least in the case of Huawei, may engage in illegal business practices (see “U.S. House Intelligence Committee sees Huawei and ZTE as security threats”). The investigators recommended that the companies not be granted government contracts and suggested that U.S. companies not buy from them as well.

Other countries, such as India, began to look into Huawei’s activities after the U.S. report. The European Union is currently considering a similar investigation, although press reports indicate that sentiment is against such a probe.

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