Huawei could benefit in U.S. from easing security concerns and Nokia-Alca-Lu merger, exec says

LAS VEGAS -- A top Huawei executive said the company's prospects in the U.S. mobile infrastructure market could be improving thanks to a range of factors including changing views on network security, market consolidation, and the shifting winds of technological evolution.

"There's [now] a much clearer understanding of how networks work," explained Huawei's William Plummer, VP of the company's external affairs for the U.S. market. Plummer, who is based in Washington, D.C., said that there's a growing understanding among political and regulatory officials that technological innovations are "eclipsing geographical, border-based solutions."

Plummer explained that recent revelations of U.S. government cyber spying by former NSA contractor Edward Snowden, as well as continuing data hacks and network security problems among a wide range of technology and consumer companies, has refocused network security concerns away from Huawei and other Chinese equipment suppliers. Instead, those worried about cyber defense are increasingly focusing on the design and construction of networks, rather than on the components of those networks.

Indeed, Plummer pointed to Huawei's recent deals to supply network infrastructure equipment to cities in Washington state and Oregon as evidence of the company's progress in the U.S. market. In September, PocketiNet Communications selected Huawei to roll out Fiber to the Home (FTTH) in Walla Walla in Washington State. And in May, Eastern Oregon Telecom selected Huawei to bring a gigabit broadband network to rural homes and businesses in Hermiston, Ore.

"We're focused on those areas that are underserved or unconnected," Plummer said here on the sidelines of the CES event.

That progress is notable considering in 2012 a U.S. government report called out China-based network vendors Huawei and ZTE as security threats that could be used as backdoors for Chinese espionage. The companies said the claims were without merit, and the chairman of Huawei USA even presented an open letter to the U.S. government spelling out its position. But as a result Huawei has largely been locked out of major network infrastructure contracts with U.S. telecom operators, including Verizon, Sprint and others.

However, Huawei's U.S. problems haven't slowed the company's sales of infrastructure equipment in other markets across the world; the company counts major wireless operators in Europe, Latin American and elsewhere as customers. Huawei, alongside Ericsson, remains one of the world's leading vendors of telecommunications networking gear three years after the U.S. government's implication of the company.

Moreover, Plummer argued that the recently closed merger between Nokia and Alcatel-Lucent -- as well as the recently announced partnership between Ericsson and Cisco -- could create additional opportunities for Huawei. He said carriers like Verizon and AT&T are keen to encourage competition among their network suppliers in order to obtain the best pricing and products, and the combination of those suppliers could motivate carriers to look to Huawei for additional options.

Finally, Plummer said the wireless industry's move toward software and virtualization could further open the door for Huawei's sales in the U.S. market. Carriers are increasingly moving toward software- and cloud-based network architectures, and software sales generally don't fall under the same security concerns that hardware sales have, Plummer said. That, he said, could create more openings for Huawei in the future.

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