STR/AFP/GETTY IMAGES - Analysts say the efforts to discredit Huawei illustrate a wariness among U.S. firms of highly successful, low-priced competitors from China that are roiling telecommunications — once a distinctly American industry.
Companies in the cutthroat field of telecommunications received a remarkable marketing document recently, one aimed at causing suspicion about one of their biggest competitors, the Chinese firm Huawei.
“Fear of Huawei spreads globally,” the report reads. “Despite denials, Huawei has struggled to de-link itself from China’s People’s Liberation Army and the Chinese government.”
Bill Plummer, spokesman for Huawei Technologies Co., talks about the company's response to a U.S. House committee report that said the phone-equipment maker may enable Chinese spying, and the impact of the government's investigation on the company's business.
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The paper’s author was Huawei’s main U.S. rival, the California-based company Cisco Systems.
The marketing campaign got a boost this week when a report from Congress said much the same thing, raising national security concerns about Huawei’s alleged use of its technology to help the Chinese government expand its overseas spying operations. U.S. suspicions surrounding Huawei have presented a business opportunity for Cisco and other firms in the hyper-competitive world of telecom. Senior Hill staffers at three separate congressional offices say an array of American tech firms have lobbied them to increase scrutiny of Huawei, using language similar to Cisco’s campaign.
Some analysts say the efforts to discredit Huawei illustrate a wariness among U.S. firms of highly successful, low-priced competitors from China that are roiling telecommunications — once a distinctly American industry.
China has complained that the hurdles faced by Huawei in particular have amounted to the kind of arbitrary trade barrier that the United States has complained about on behalf of its companies around the world.
No charges have been formally brought. And any evidence of whether Huawei is a threat to national security has been locked in a classified report that can be viewed only by a select few in government.
That has created an ideal environment for U.S. businesses to gain an upper hand. U.S. lawmakers have warned companies to stop doing business with Huawei and ZTE, another Chinese telecom equipment provider. In recent years, U.S. officials have thwarted two attempts by Huawei to buy U.S. firms.
In April 2011, lawmakers sent a letter to President Obama, criticizing the Agriculture Department’s contract with Huawei. In November 2010, Sprint Nextel chief executive Dan Hesse was asked by then-Commerce Secretary Gary Locke to reject bids from Huawei.
“Huawei has been extremely successful and disruptive around the world, but the one market it hasn’t been able to penetrate is the U.S.,” said Mark Fabbi, a vice president of research at Gartner. “And that’s mainly because of politics and lobbyists pushing really, really hard to put up barriers.”
The seven-page September 2011 presentation distributed by Cisco was obtained by The Washington Post from a person familiar with Cisco’s sales strategy who was not authorized to comment publicly and spoke on the condition of anonymity. Titled “Huawei’s & National Security,” the document was used to lure clients away from Huawei, the person said.
Cisco did not respond to requests for comment about its lobbying activity or the sales document. Spokesman John Earnhardt said, “In the last couple years, 18 months or so, we’ve taken a more competitive stance against competitors including HP, Huawei and Juniper.”
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