UPDATED: Clearwire 'materially reducing' Huawei footprint in TD-LTE buildout
Clearwire (NASDAQ:CLWR) reiterated that it is reducing the amount of Huawei equipment it is using in its TD-LTE network buildout as compared with its existing WiMAX network, likely a response to ongoing concerns that Huawei's network gear poses a threat to U.S. national security.
"Huawei represents less than 5 percent of our total LTE spend, and we are materially reducing their footprint in our LTE network," John Saw, CTO of Clearwire, told FierceWireless.
Clearwire said it initially disclosed the reduction of its use of Huawei's equipment last year. The company reiterated its relationship with Huawei amid reports that U.S. officials are asking Sprint Nextel (NYSE:S) to spend up to $1 billion to remove Huawei's equipment from Clearwire's network. The removal of Huawei's equipment would be a condition of SoftBank's proposed $20.1 billion purchase of 70 percent of Sprint, which still requires federal approval. As part of Sprint's SoftBank transaction, Sprint is working to acquire the 50 percent of Clearwire it does not own.
Concerns over Huawei's equipment stem from a report last year from the House Permanent Select Committee on Intelligence that recommends the U.S. block acquisitions and mergers involving Chinese vendors Huawei and ZTE. The report also recommends that the U.S. government and U.S. companies avoid using equipment from the two Chinese companies. The companies have vehemently denied all of the allegations against them.
In response to the situation, Clearwire's Saw explained that the company "is committed to ensuring that our network and our customers' data are secure. We have great respect for the U.S. government and their oversight role over the nation's infrastructure. We continue to be transparent with the government and have thoroughly reviewed our plans with the technical arms of multiple federal agencies."
Saw said Clearwire's incumbent WiMAX vendors are adding LTE in their respective markets in the initial phase of Clearwire's LTE build. "The exception is that, in markets that previously had Motorola WiMAX equipment, we plan to use Samsung equipment," Saw said. "It is important to point out that there are no longer any domestic suppliers for radio base station infrastructure equipment. Samsung and Huawei base stations are deployed at the edge of our network, while the 'brains' our core network are being supplied by domestic vendors like Cisco and Ciena."
Saw said Clearwire will continue to use Sweden's Ericsson (NASDAQ:ERIC) for network maintenance.
Finally, Saw reiterated that Clearwire is "subjecting every LTE base station vendor to a Trusted Delivery Program whereby we require that all of our vendors' base station and software pass extensive testing by a U.S. government-approved third party company recognized for vetting critical infrastructure systems for security weaknesses and threats."
Clearwire plans to have 2,000 TD-LTE sites on air by the end of June and 5,000 TD-LTE sites on air by the end of December. Sprint intends to use those cell sites as an LTE offload network--Sprint has said, assuming it successfully acquires Clearwire by mid-year, Sprint can begin launching devices in the late third quarter that take advantage of Clearwire's TD-LTE network.
Report: Sprint could pay $1B to rip out Huawei's kit from Clearwire's network
Reports: Dish lines up financing for $25.5B Sprint bid
Dish's Ergen: We have backup options in wireless if we lose Sprint deal
SoftBank CEO points to TD-LTE expertise as edge on Sprint deal
Dish continues sparring with SoftBank over competing Sprint bids
It's Dish's Ergen vs. SoftBank's Son in a war of words over Sprint
Report: Worries about Chinese vendors weigh on Sprint/Softbank deal
Article updated May 23 to clarify Clearwire's use of Huawei's equipment.