Huawei's U.S. expansion ambitions face government security obstacles

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Huawei may still be an insurgent player in the U.S. telecom market, but with a presence at both Cox Communications and WiMAX provider Clearwire, it is clear the Chinese player is making an impact. However, the company's possible ties to the People's Liberation Army (PLA) remain one of its largest security obstacles to proceed with potential acquisitions of Motorola and other U.S.-based telecom vendors.

Similar to Alcatel's acquisition of the former Lucent Technologies in 2006, Huawei is reportedly working out a "mitigation agreement" with the U.S. government. These classified agreements typically include stringent security protocols and sometimes the creation of an advisory panel of U.S. citizens that will manage the company's operations in the country. At this point, all that Huawei would say is that it was "open to exploring options to address concerns" of the U.S. government.

In 2008, Huawei's joint bid to acquire 3Com fell apart when it appeared that the U.S. government would prevent the deal from going forward over potential national security issues. Although Huawei denies it has any ties to China's military, company founder Ren Zhengfei, is a former PLA soldier.

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- Telecompaper has this article

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