Less than a week after Huawei CEO Richard Yu voiced his frustration with the US market on the CES stage, reports indicate that lawmakers are pressuring AT&T to sever ties with the Chinese equipment maker.
Relations between the two companies reportedly cooled after AT&T pulled out of a planned deal to distribute Huawei smartphones. Huawei had been preparing to announce that agreement at CES, a move that could have paved the way for the company’s entry into the US consumer market.
“If they have ties to Huawei or China Mobile, it could hamper their ability to do business with the US government,” one source said.
Those concerns now extend to Huawei’s telecoms equipment business. According to Reuters, two congressional aides said lawmakers are urging AT&T to cut all ties with Huawei over security worries.
Foreign investment in critical infrastructure like telecommunications is receiving heightened scrutiny. Observers often point to Huawei founder Ren Zhengfei’s past service as an officer in the Chinese People’s Liberation Army as one factor behind the intensified attention on the company.
US government and security officials have repeatedly warned that Huawei-made telecommunications equipment could provide a route for unauthorized access by the Chinese government or the People’s Liberation Army. In a 2011 open letter, Huawei called those security allegations “unfounded and unproven” and invited the US government to investigate its operations.
“The US government has also blocked a string of Chinese acquisitions over national security concerns,” commented observers tracking recent policy decisions.
Similar worries have been raised in the UK. The Conservative Party flagged security issues when Huawei bid for Marconi in 2005, and Huawei equipment was cited as a potential risk in a 2009 government briefing by Alex Allan, then chairman of the Joint Intelligence Committee.
In response to such concerns, the UK established a board to inspect Huawei equipment before it is used in critical infrastructure. That board includes representatives from GCHQ, the Cabinet Office, and the Home Office.
Sources say American companies have been warned that maintaining relationships with Huawei or China Mobile could limit their ability to compete for US government contracts. The US has already blocked several Chinese acquisitions on national security grounds, including the proposed purchase of MoneyGram by Ant Financial.
AT&T declined to comment on the reports, but stated that it has not made any decisions regarding its choice of 5G suppliers.
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