SHENZHEN, China--Huawei unveiled a three-pronged security plan that the firm hopes will alleviate concerns from operators and help it win more business in the U.S. market.
The company, which is reportedly being considered by Sprint Nextel (NYSE:S) for an infrastructure deal, has been trying to address concerns raised by a group of Republican senators that a potential deal between Sprint and Huawei would compromise national security. The senators are concerned about possible ties between the firm and the Iranian government and the Chinese military. Huawei strongly denies these claims.
During a media junket hosted by Huawei at the company's headquarters here, Kevin Zhang, Huawei's vice president of its global marketing department, told FierceWireless that his company believes security is a growing concern for wireless operators as they migrate from the traditional TDM (time division multiplexing) network to an all-IP network such as that offered by LTE. Speaking through an interpreter, Zhang said that Huawei believes it is leading the industry with its new security framework and it may eventually become a requirement for all vendors.
Huawei's security plan includes the following:
- The establishment of a national security committee in the U.S., the U.K. and France. In the U.S., the committee will be headed by Matt Bross, Huawei's CTO, who lives in the United States.
- The opening up of certain software source codes in Huawei equipment so that they are accessible to third parties. This includes the hiring of third parties, such as accredited test lab EWA, to conduct auditing and testing.
- The trusted delivery of all products. Because the company's electronics supply chain is global, Huawei will offer trusted delivery in every market. For example, in the U.S. market delivery will be conducted and staffed by only U.S. citizens.
Despite Huawei's efforts, it's not clear whether this strategy will guarantee the vendor more business in the U.S. market. Peter Jarich, an analyst with Current Analysis, said that U.S. operators want to see commitment to the market in the form of local research and development, local delivery and other commitments, before they will sign a major deal with a vendor. Jarich pointed to Ericsson (NASDAQ:ERIC) as an example of a vendor that has built significant U.S. presence and been rewarded for its efforts with Tier 1 infrastructure contracts. Ericsson is a supplier of both Verizon Wireless (NYSE:VZ) and AT&T Mobility's (NYSE:T) LTE radio access network.
Nevertheless, Huawei is intent upon making inroads with Tier 1 U.S. operators. According to Huawei spokeswoman Jannie Nguyen, the company ivested more than $62 million in research and development in the U.S. last year alone. In addition, Huawei announced earlier this year that it will add 600 jobs in North American in 2010. A year ago Huawei hired Bross, formerly with BT, as its CTO. Part of Bross's duties include working on product development for Huawei's North American operator customers.
So far, Huawei has landed network contracts with Cox Communications for its CDMA network and Clearwire (NASDAQ:CLWR) for its WiMAX play. According to Zhang, this is just the tip of the iceberg. He believes that Huawei will gradually achieve success in the U.S. market as it did in Europe. He said that it took five years for Huawei to win its first Tier 1 operator contract in Europe and 10 years to achieve a leadership position in the market. Zhang said he expects a similar timeline for the U.S.
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