UK partners fight Huawei's corner after CFO arrest and 5G snub

UK partners dismiss latest headlines as 'propaganda' and a 'political event' as they throw weight behind Chinese vendor

Chinese vendor Huawei has had a run of unfortunate incidents.

Last week saw New Zealand join a growing list of countries, including Australia and the US, to bar its equipment from being used by local networks in their 5G offerings, based on national security concerns.

On Monday, MI6 chief Alex Younger warned the UK that it needs to decide how comfortable it is using Chinese-owned technologies within its communications infrastructure, as reported by the BBC.

On Wednesday, the Financial Times revealed that BT is planning to remove Huawei gear from its 3G and 4G network, and will not be using it as part of its 5G capabilities. It will however continue to use the vendor's offerings that it does not deem to be at the "core" of its service.

Meng Wanzhou, Huawei's CFO and daughter of its founder, was arrested in Vancouver on 1 December and faces extradition to the US.

The reasons for her arrest have not been disclosed, but it is allegedly in connection with violating US sanctions against Iran.

European shares in the company dipped when news of her detention was publicised on Wednesday, Reuters reported.

However, UK partners are unworried at the onslaught of negative attention towards the telecoms and networking giant.

Cliff Fox, COO of Pure Technology Group, admitted that the negative press is a concern, but believes that there are ulterior motives behind the headlines.

"It is one of the biggest tech vendors on the planet and has good equipment," he said.

"Some of the stuff that has been written about it has been prompted by people with vested interests, so take it with a pinch of salt.

"For me, it is completely unsubstantiated and there is a lot of scaremongering going on.

"I believe some of this is propaganda-led and, in particular, negative commentary from the US against competing rivals."

Fox also believes that the BT comments have been "misinterpreted", and that Huawei will continue to be used in its national infrastructure.

The recent run of negative headlines wouldn't deter Pure Technology from working closely with the vendor, Fox added.

"If there were some physical proof of something underhand going on, we would take that seriously," he said.

"But we also know that several other tech vendors have spent time, effort and money to disparage and cast aspersions against its security and haven't been able to find anything.

"We know some major ISP telcos who use Huawei, and have done their own investigations, and given it a clean bill of health," he said, adding that the company will continue to monitor ongoing developments.

Alex Tatham, MD of Westcoast, which distributes the vendor's devices, said the arrest of the CFO was "outrageous", and stated that Huawei is being treated badly.

"It is an exciting, innovative business that has changed the end-point landscape, and I am genuinely shocked at the level of anti-Huawei press out there," he said. "The arrest of the CFO is a political event, rather than a corporate one."

Tatham is confident that sales of Huawei devices will not be affected by the recent publicity, but noted that its 5G service is clearly being negatively affected and needs to be addressed.

He added that Huawei's competitors may affect its fortunes more than the negative publicity will, calling out Cisco.

"I think Cisco have been aggressive against Huawei when it comes to the 5G business, perhaps more than they need to be," he claimed.

Silver lining

However, it has not all been doom and gloom for Huawei this week, as research house Context reported that it had overtaken Samsung as the second-largest tablet seller in the distie channel in Western Europe.

Apple retained pole position for Q4, but Huawei drove most of the growth for the period and continued to increase its footprint across distribution, reporting a 221 per cent year-on-year growth for October.

Almost 60 per cent of tablet sales were into retail and e-tail, and channel sales to business also increased.

"Tablet sales through Western European distributors picked up in Q2 2018 following a long period of decline," said Marie-Christine Pygott, senior analyst at Context.

"More recent growth has mostly been driven by the top three vendors, as many top-tier PC manufacturers and smaller vendors have left the segment or reduced their focus on tablet innovation and marketing."