AT&T Backs Out Of Huawei Deal Over Concerns Of “Chinese Espionage”

Imagine you’re Chinese phone maker Huawei for a second. You fly into Vegas for CES, and you’re all set to announce that you’re partnering with AT&T to sell phones in the US. But at the very last minute you find out that the deal is off because  AT&T pulled out of the deal at the last minute. And according to Reuters politicians nixed the deal citing security concerns:

AT&T was pressured to drop the deal after members of the U.S. Senate and House intelligence committees sent a letter on Dec. 20 to the U.S. Federal Communications Commission (FCC) citing concerns about Huawei’s plans to launch consumer products through a major U.S. telecom carrier.

The letter to FCC Chairman Ajit Pai, which was signed by 18 lawmakers, noted concerns about Chinese companies in the U.S. telecommunications industry.

The letter notes the committee’s concerns “about Chinese espionage in general, and Huawei’s role in that espionage in particular.” A copy of the letter was seen by Reuters.

This isn’t the first time that Huawei has been involved in something like this as accusations of spying for China have been in the air for years. Take this example from 2013. But because of these latest accusations, Huawei has gone to selling their phones “only through open channels” meaning not through US carriers. They also rebuff the security concerns:

Huawei’s Washington-based spokesman William Plummer said on Tuesday that “privacy and security are always our first priority.”

“We are compliant with the world’s most stringent privacy protection frameworks and requirements and have gained the trust of over 150 million customers in the past year alone,” Plummer said in an email.

Huawei faces an uphill battle. Besides the PR related issues, not a lot of Americans buy phones through “open channels”. Instead they buy them through carriers. Thus not having a carrier deal really limits their growth in the US. Until they can completely address these spying accusations, they’re likely not to be a challenger in the US market.

2 Responses to “AT&T Backs Out Of Huawei Deal Over Concerns Of “Chinese Espionage””

  1. […] seems that Verizon is joining AT&T in dumping Huawei as a dance partner when it comes to sales of the latter’s smartphones in the US according to […]

  2. […] parting ways with Huawei and won’t be selling their phones in their stores. This comes after AT&T and Verizon backed away from dealing with the Chinese phone […]

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