China Telecom Americas Eyes Wholesale Partner; House Committee to Probe Chinese Telecom
China Telecom Americas wants to become a mobile virtual network provider in the U.S. through wholesale partnership, CEO Donald Tan said in an interview. The largest international subsidiary of China Telecom isn’t considering acquisition opportunities now, Tan said. Meanwhile, the House Intelligence Committee will investigate security threats posed by Chinese telecom companies working in the U.S. The probe includes everything related to the cellular supply chain but the scope may narrow later, a committee spokeswoman said.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
Network security concerns are not about Huawei, said Will Plummer, Huawei vice president-external affairs. The company welcomes an open and fair review of network security challenges, he said. Citing “vague unsubstantiated national security concerns to prevent open competition in the U.S. market is unfair” to Americans who either directly work for Huawei or whose jobs are supported by Huawei’s procurement of U.S. services and goods, he said.
China Telecom, which uses CDMA technologies, has started market trials with potential wholesale partners, Tan said. The company seeks to offer wireless services in the U.S. in 2012, he said. Initially, the company plans to target the Chinese-American population and travelers between the two countries, he said. As a result, handsets would be able to function in both countries. Regarding the possibility of acquisitions in the U.S., Tan said he was not considering that option. Sprint Nextel and Verizon Wireless are the national carriers that also operate CDMA networks.
In addition to retail markets, enterprise service is a top priority for China Telecom Americas next year, Tan said, noting the company has already marketed services to U.S. corporations for more than 10 years. The company wants to expand its enterprise data, network, IP access and Multiprotocol Label Switching virtual private network services in the Americas, he said.
The company’s plan might depend on the House Permanent Select Committee on Intelligence’s investigation, which will review the extent to which these companies provide the Chinese government an opportunity for increase foreign espionage, threaten critical infrastructure, and further the opportunity for Chinese economic espionage. The committee will also review whether the U.S. government -- including the collection resources of the intelligence community -- are appropriately focused on discovering “the full scope of the Chinese threat and developing mitigation measures to ensure the security of our nation’s telecommunications networks,” said a joint statement by committee Chairman Mike Rogers, R-Mich., and Ranking Member Dutch Ruppersberger, D-Md.
"We are looking at the overall infrastructure threat and Huawei happens to be the 800 pound gorilla in the room, but there are other companies that will be included in the investigation as well,” said Rogers. Huawei is a Chinese telecom equipment manufacturer. When asked if China Telecom’s plan to offer services in the U.S. is subject to the probe, a committee spokeswoman said “we are not taking anything off the table” at this point. The committee will narrow the investigation as it moves forward, she said. China Telecom Americas declined to comment. The committee will seek information from relevant telecommunications providers, request information and briefings from private-sector telecom security experts, conduct interviews with key U.S. government officials, and hold hearings and briefings to “uncover what these Chinese companies are capable of doing and how our intelligence community could be better focused on this threat.”