Huawei in the US

Huawei Many western governments have banned Huawei, the Chinese equipment manufacturer from bidding on government contracts. In the US the government warned the industry against using Huawei because of security concerns and most of the large carriers have said that they won’t use their equipment. But Huawei is not officially banned from the US and they are now making proposals to sell equipment to smaller carriers like independent telcos.

Huawei can make a convincing sales pitch. It’s been reported that their equipment runs about 30% less expensive than similar equipment made by Calix, Adtran and Metaswitch. Since small telcos have been losing historical revenues on many fronts they are feeling pressured to do everything possible to find ways to be competitive and survive. So any offer for less expensive equipment can look really attractive.

Huawei is an interesting company. The company was supposedly founded on a shoestring by founder Ren Zhengfei and has grown to be the number one telecom equipment manufacturer in the world. There are reportedly over three billion customers on Huawei-made cellular networks. But this was not your typical startup and the company got a huge leg up with gigantic early orders from the Chinese government. They are successful in large part due to being the preferred equipment manufacturer in the exploding Chinese market. But Ren has never given a public interview and is a mystery to the world.

It’s understandable that western governments would be nervous about allowing Huawei equipment in US government offices. There is some fear that the Chinese government could somehow build spyware into the operating software. But are there any reasons for the government to block Huawei from selling to general network providers? Should telcos have any fear of using their equipment?

The only fear I can think of is that there might be a hidden Trojan horse inside the operating software that could allow Huawei to shut down networks remotely should the US and China ever get at odds with each other. But this just doesn’t seem like a credible threat to me. This would only have to be done once to any network anywhere and Huawei would be forever shunned outside of China. And while such a shutdown could be devastating to the network involved, this would not be hugely crippling to the US economy.

A more credible reason to not use Huawei is that they are not a good corporate citizen. Cisco has found large swaths of Cisco code, right down to syntax and punctuation errors in Huawei operating software. Huawei seems to come out with innovations very soon after they are announced elsewhere and they clearly do not have any notice or respect for western patents. Stealing technology and software so blatantly would not be tolerated in the western world and any manufacturer caught doing this would be sued out of existence.

So western network owners are faced with a dilemma. They can buy tried and trusted equipment from the largest manufacturer in the world at significant discounts. Or they can boycott Huawei for philosophical reasons. Companies that steal US technology ultimately do our economy a lot of harm, and this is reason enough in my mind to boycott them for their bad behavior.

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