US bill threatens ban on Huawei

Chinese companies could be banned from US government contracts under the terms of a bill currently before Congress. If successful, it would mean that the likes of Huawei and ZTE would be shut out of any future government deals.

There’s been disquiet in the US for some time about Huawei. Just last week, AT&T pulled out of a planned agreement to sell Huawei phones, while last year a federal grand jury ordered the Chinese company to pay $4.8m in damages to T-Mobile after it was found to have copied some designs from the mobile operator.

The bill before Congress, which has been introduced by Texas representative Mike Conaway, seeks to “To prohibit the Government from using or contracting with an entity that uses certain telecommunications services or equipment, and for other purposes.” A few paragraphs later, the mention of the ‘entity’ makes more sense. “In its 2011 ‘‘Annual Report to Congress, the Department of Defense stated that, ‘‘China’s defense industry has benefited from integration with a rapidly expanding civilian economy and science and technology sector ... including Huawei, Datang, and Zhongxing, maintain close ties to the PLA (People’s Liberation Army).’’

Availability

The bill, if passed, would not affect Huawei’s availability in the US. While it doesn’t have any bundled deals with carriers, its smartphones will still be available. The company also sees the US as less important than Europe when it comes to overseas expansion.