China syndromeHuawei tries to crack U.S. market again with U.S. Cellular deal

In its continuing bid to enter the U.S. telecom market, Chinese giant Huawei Technologies Co. recently announced that it was the finalist for a contract to build a fourth generation wireless network for U.S. Cellular Corp, the nation’s sixth largest wireless carrier.

Huawei, the world’s second largest telecom manufacturer, has been repeatedly denied access to the U.S. market as lawmakers cite national security concerns

In response to the deal, U.S. lawmakers sent a letter to President Obama to permanently stop Huawei’s efforts to sell network infrastructure in the United States. The letter sought a “permanent legislative solution,” and was signed by Senators Jon Kyl (R-Arizona), Saxby Chambliss (R – Arizona), Richard Burr (R – North Carolina), James Inhofe ( R - Oklahoma), and Tom Coburn (R – Oklahoma), as well as Republican Representative Darrell Issa of California.

In the past, lawmakers have vocally opposed Huawei’s attempts to enter the U.S. market alleging connections to the Chinese government and fears that the telecom giant would install equipment that contains bugs that would make it easier for China to steal information, shut down communications, or make networks easier to hack.

Huawei has repeatedly fended off these claims and denies any link to the Chinese government. The company insists that it is an impartial private multinational corporation.

In February, Ken Hu, the deputy chairmen of Huawei, posted an open letter on the company’s website stating that the accusations against Huawei are simply “falsehoods” that “have had significant and negative impact on our business activity.”

Most recently Huawei was forced to end its partnership with 3Leaf systems, a small California based company that focuses on cloud computing. Huawei had purchased some patents and hired a few employees from 3Leaf, but was made to reverse the deal by government officials.

In 2008 the company’s attempts to purchase 3Com were halted by the government, and last year Huawei was not allowed to upgrade Sprint Nextel Corp’s network.

Huawei believes these claims are outlandish and insists the company is a distinct multinational corporation that is separate from the Chinese government.

According to Bill Plummer, a company spokesman, “Huawei is Huawei. It’s a multinational company. It isn’t China. It shouldn’t be held hostage to the tense relationship between the two governments.”

Huawei is one of China’s largest companies, providing products to forty-five of the world’s top fifty telecom operators in over 100 countries. Supporters of the company say its products have been safely sold to nearly every major phone company in the world.

To ensure that this deal is approved, Bill Plummer, the vice president for government affairs for Huawei USA, said that the company has been in full communication with the government. It has already sent a letter to the DHS, alerting the agency of its intentions to build U.S Cellular’s new network (see correction below).

U.S. Cellular is expected to announce its decision in the next several weeks and is currently considering bids from L.M. Ericsson and Alcatel-Lucent SA.

Correction

12 April 2011: In the last paragraph, the article states that “It [Huawei] has already sent a letter to the DHS, alerting the agency of its intentions to build U.S Cellular’s new network.” Huawei has not written a letter to the DHS regarding U.S. Cellular. The company did write a letter informing the agency that it was consulting with the National Institutes of Standards and Technology and a number of states on public safety and public broadband wireless solutions.