'Security threat' Huawei puts regaining US trust on hold

The controversial Chinese telecoms group Huawei has given up, for now at least, on persuading Washington that it can be trusted not to spy on American citizens.

A House committee last year said Huawei, one of the world's biggest telecoms companies, posed a national security threat, recommending big US phone companies not to use its kit.

The company, founded by former Chinese People's Liberation Army engineer Ren Zhengfei, has been forced by the effective ban to focus on markets such as the UK and Europe.

Chen Lifang, a board member, said yesterday she did not hold out much hope for a change of heart in Washington: "They recognise that in the past Huawei did not have any problems, but what they are concerned about is the future. If they are concerned of the future, we cannot solve that."

The British Government is also concerned the previous administration was "insufficiently robust" in its checks on the company's role in the UK, where it runs a key cyber security centre testing telecoms infrastructure. The Government has launched a review into the site, which is set to report by the end of the year. Australia has also restricted Huawei from certain critical national broadband infrastructure on security grounds.

Meanwhile, Ms Chen said the company's consumer arm had considered using a different brand name for its mobile phones as "foreigners could not pronounce Huawei". However, it decided to stick with the name as it was well-established in the telecoms industry.

Huawei is pushing hard into smartphones, and yesterday announced a new deal to use British technology firm Arm's chip designs in its new generation of phones.

Despite its pledge to grow in the phones business, Ms Chen denied speculation Huawei could launch a bid for BlackBerry or HTC. Talk of takeovers in the sector was reignited by this week's Microsoft takeover of Nokia. Huawei's smartphone head, Richard Yu, suggested it could seek takeovers, but Ms Chen said he had been misunderstood, joking that he needed better media training.

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