Financial Post | January 19, 2011 | Jamie Sturgeon
MARKHAM, Ont. – When Huawei Technologies Co. was rebuffed once again by a U.S. company last fall — at the behest of lawmakers — it appeared the Chinese telecom network maker’s North American ambitions might finally be on the wane.
But with a flurry of activity this week, Huawei clearly signalled its sights remain fixed on the continent.
On Tuesday, the fast-growing private firm opened new Canadian headquarters in suburban Toronto, one day after it announced that a pair of joint research initiatives have been established with Bell Canada and Telus Corp., likely its largest North American customers.
“We have a long-term commitment to North America,” Charlie Chen, the Shenzhenbased company’s senior vice-president of marketing, said in an interview.
Huawei’s success in Canada continues to accrue. The company also announced Tuesday a new contract with startup operator Wind Mobile. But the bigger prize lies south of the border, a much larger and more lucrative market that Huawei has coveted a significant position in for a decade but has been denied.
The sudden and strong commitment to Canada, which includes an initial $67-million investment, may ultimately be directed at assuaging concerns in Washington.
“I would think there is a certain amount of optics in this,” said Iain Grant, principal at SeaBoard Group.
Since 2001, the United States has been a hostile environment for the Chinese company, its experience typified by thwarted bids on high-profile acquisitions and contracts because of governmental security concerns.
Twice last year alone deals were scuttled due to anxiety emanating from the U.S. Congress and other government organs. First, an acquisition offer was denied in July for Motorola Inc.’s network division, eventually won by European rival Nokia Siemens Networks. A bid to supply network gear to major carrier Sprint Nextel Corp. was dropped in the fall.
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