U.S. regulators are contemplating different approaches to Huawei's entreaties to get further involved in the U.S. market, according to a report in the Financial Times.
The report, which cited unnamed sources, said regulators with the Committee on Foreign Investment, which reviews foreign acquisitions for national security concerns, are weighing two different approaches to Huawei. One approach, the report said, is to approve a future transaction for Huawei, but insist on striking a "mitigation agreement," a series of conditions and security measures that could give regulators greater insight into Huawei's corporate structure. Huawei is a privately held company. The other view is to continue to keep Huawei from getting further enmeshed in the U.S. market, the report said.
A Huawei spokeswoman did not immediately respond to a request for comment.
According to a recent report in the Wall Street Journal, Huawei hired a raft of U.S. advisers to help it overcome security concerns. The report said Huawei has tapped several law firms that specialize in telecom, mergers and winning federal approval for sensitive international deals.
The actions come amid a flurry of activity for the Chinese vendor. According to the FT, Huawei lost a bid for 2Wire, a privately held U.S. company that makes broadband software and that was acquired by the British firm Pace for $475 million. Huawei also lost a bid for Motorola's (NYSE:MOT) wireless networks unit, which went to Nokia Siemens Networks for $1.2 billion. In both of these cases, the report said, security concerns figured into the bidding and required Huawei to offer a premium.
Huawei plans to increase its presence in North America this year by adding 600 jobs. The company already won a contract with Cox Communications for the company's 3G CDMA network, and is a supplier for Clearwire's (NASDAQ:CLWR) mobile WiMAX network. However, so far it has been shut out of deals with any Tier 1 U.S. carriers.
- see this FT article
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