Enter the lawyers and lobbyists and the wireless business gets really dirty: Sprint Nextel has decided to block both Huawei and ZTE from participating in bidding for Sprints multi-billion-dollar network modernization project. The reason is “mounting national security concerns” about the Chinese vendors, according to a report in the Wall Street Journal citing “unnamed sources familiar with the matter”. It is claimed that Alcatel-Lucent, Samsung are now the two finalists, with Ericsson (which is already operating large parts of Sprint’s network) as outside bet.
Department of Defense officials are allegedly “worried about the two companies’ ties to the Chinese government and military”, claiming that the two companies could be subject to “significant influence by the Chinese military which may create an opportunity for manipulation of switches, routers, or software embedded in American telecommunications network so that communications can be disrupted, intercepted, tampered with, or purposely misrouted.” Of course, both Huawei and ZTE deny that such influence exists. This could potentially be a significant blow to Huawei which among others is a main supplier to Clearwire’s mobile WiMAX network.
Certainly there is a certain element of “flag waving” and “bad-mouthing” involved . Is this a sign of desperation or is this common (US) business practice ?
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