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TheStreet Open House

Gruia: Stop the Cheap Shots at Huawei

NEW YORK ( TheStreet) -- This month marks the tenth anniversary of the departure of my beloved father, from whom I was fortunate to learn a wide range of things - law and philosophy among them. On one occasion, my father taught me the concept of argumentum ad absurdum, (from Latin, it literally means "argument from absurdity"), a line of reasoning that demonstrates a false statement by showing the absurd or untenable results that would logically follow from its acceptance.

Such an argument comes to mind when considering the treatment that Chinese telecom vendors are getting in the U.S. Despite no "smoking gun" evidence of any wrongdoing, Huawei has been judged to pose a security risk to the U.S. because its infrastructure could allegedly be used to spy on Americans. This security threat scenario has been a prevalent theme in U.S. press reports following investigations by U.S. House committees.


The U.S. government made clear its antipathy toward Huawei in the fall of 2010 when it actively lobbied Sprint (S) not to select the Chinese telecom equipment maker to help build the operator's LTE network.

First, the facts: Huawei, which posted 2012 revenue of $35.4 billion, has eclipsed Ericsson as the world's largest telecom equipment. That's a long way from the company's inception twenty five years ago as a one-room workshop in a fishing village near Hong Kong. That village, Shenzhen, is now among the largest and most prosperous cities in China.

Secondly, Huawei has become the leader in the growing 4G Long-Term Evolution (LTE) market. According to the Global mobile Suppliers Association (GSA) in 2012, a total of 97 service providers announced various LTE commercial contracts. Huawei was the top vendor in terms of total confirmed contracts awarded with 41, easily topping Ericsson (ERIC) at 23, according to Frost & Sullivan estimates.


Huawei's LTE customer list is an enviable: Telenor, Vodafone (VOD) (Germany, Italy), T-Mobile (Germany, Hungary), Telefonica/O2 (Czech Republic, Germany), Bell and Telus (Canada), Yota> (Russia), Softbank (Japan), Bharti Airtel (India), Optus (Australia), Everything Everywhere (UK) and TIM (Italy). Huawei has clinched at least one Tier-1 operator LTE win in every G-7 country except the U.S.

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