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Huawei No Longer Focusing on U.S. Carrier Business

Huawei chief technology officer Li Sanqi told the IDG News Service on Tuesday that the company has decided to abandon its attempts to focus on the North American carrier networking market due to "geopolitical reasons". Instead, the company will focus on the rest of the global market where it's showing significant growth including homeland China.

"Don’t get me wrong, I’d love to get into the U.S. market. Thirty percent, it’s a high-value market," he said.

Huawei's carrier networking group business in North America took a beating back in October 2012 when a U.S. congressional panel told local carriers to avoid purchasing the company's networking equipment. They expressed their fears over Huawei's alleged ties to the Chinese government, implying that the technology could be used by China to secretly conduct hacking attacks and cyberespionage.

Naturally, Huawei rejected the allegations and insisted that its equipment is safe to use. But the damage had already been done – all the work Huawei had done over the years cultivating business in the local telecom industry was down the tubes. Now the company’s carrier networking group is dropping the U.S. from its priorities despite the market share.

"We today face reality. We will focus on the rest of the world, which is reasonably big enough and is growing significantly," Sanqi added.

One market Huawei will focus on is China which already has over one billion mobile phone accounts. The country is gearing up to launch new 4G networks, and tech regulators are expected to issue commercial 4G licenses later on in 2013.

Huawei also recently focused on Europe where it has reportedly doubled its workforce. "The open and innovative environment in Finland is an ideal place for Huawei to strengthen our global R&D capabilities for devices, creating opportunities for both Huawei and the Finnish telecommunications industry," said Kenneth Fredriksen, Vice-President, Huawei Central, Eastern and Nordic Europe.

Despite the focus on Huawei, the American government is seeking to limit the use of China-based devices across the board. Back in March, The New York Times said that Sprint Nextel and its Japanese suitor SoftBank will enter into an agreement with local law enforcement officials that restricts their combined ability to pick suppliers for their telecommunications equipment and systems.

"The agreement would allow national security officials to monitor changes to the company’s system of routers, servers and switches, among other equipment and processes," the paper said. "It would also let them keep a close watch on the extent to which Sprint and SoftBank use equipment from Chinese manufacturers, particularly Huawei Technologies."

On Tuesday, Verizon said in its 2013 Data Breach Investigations Report that 96-percent of espionage cases reported in 2012 were attributed to China. "This may mean that other threat groups perform their activities with greater stealth and subterfuge," the report said. "But it could also mean that China is, in fact, the most active source of national and industrial espionage in the world today."