ZTE and Huawei: Will US Intelligence Committee show evidence to support their claims on security threats?

Telecom Lead Asia: Will the US Intelligence Committee show enough evidence to support their claims on security threats posed by Huawei and ZTE?

It is not known whether the panel has any evidence to support their claims and fears. Their report will be available on Monday. If there is enough evidence, it will hurt both ZTE and Huawei. At the same time, it will bring cheers to Cisco, Ericsson, Alcatel-Lucent, Nokia Siemens Networks and others.

The U.S. panel’s draft report faulted both Huawei and ZTE for failing to satisfy its requests for documents, including detailed information about formal relationships or regulatory interaction with Chinese authorities.

Huawei generated around 4 percent of its group sales from the United States, while ZTE’s U.S. revenues made up 2-3 percent of its overall figure. The bulk of both companies’ U.S. sales comes from selling handsets through U.S. carriers such as Verizon, Sprint and T-Mobile USA.

Meanwhile, both ZTE and Huawei clarified that they are not posing any security threat to America.

China’s foreign ministry also said that Chinese telecoms companies operate according to market rules, urging the United States to set aside prejudices when it came to Huawei Technologies and ZTE.

“Chinese telecoms companies have been developing their international business based on market economy principles. Their investment in the United States embodies the mutually beneficial nature of Sino-American economic and trade relations,” said ministry spokesman Hong Lei.

Quoting the U.S. House of Representatives’ Intelligence Committee’s draft report, several American media reported that China’s top telecommunications gear makers should be kept from the U.S. market because they cannot be trusted to dodge Chinese state influence and thus pose a security threat.

The draft says U.S. intelligence must stay focused on efforts by Huawei Technologies and ZTE to expand in the United States and tell the private sector as much as possible about the purported espionage threat.

The panel leaders have done extensive investigation of the two firms for the last 11 months.

In the U.S. handsets market where Apple and Samsung dominate, ZTE ranks sixth and Huawei eighth, according to industry figures.

In India, Huawei spokesperson said they will comment after seeing the complete report.

“Baseless suggestions otherwise or purporting that Huawei is somehow uniquely vulnerable to cyber mischief ignore technical and commercial realities, recklessly threaten American jobs and innovation, do nothing to protect national security, and should be exposed as dangerous political distractions from legitimate public-private initiatives to address what are global and industry-wide cyber challenges,” Huawei spokesman William Plummer told Reuters through email statement.

The panel’s recommendations will likely hurt Huawei and ZTE’s plans to expand their business in America.

ZTE said on Monday that the scope of a U.S. committee probe into Chinese telecom equipment makers should be expanded to protect U.S. national security and that it is not directed or controlled by the Chinese government.


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