Huawei, spurned by U.S., expands in Europe

Huawei, spurned by U.S., expands in Europe

SAN FRANCISCO—Chinese telecom infrastructure manufacturer Huawei Technologies has set its sights on expanding its European base after security concerns in the U.S. slowed the company’s North American progress.

Huawei said Monday (Dec. 10) that it will double its European workforce, employing more than 14,000 workers over the next three to five years, providing jobs in areas recently hard hit by tech layoffs.

In Finland, where Huawei said it intends to open and invest some 70 million euros ($91 million) in an R&D center for new smartphones, snapping up employees laid off by local firm Nokia. The center would be Huawei’s eleventh in the region, with a staff of around 100 people.

By consolidating its foothold in Europe, Huawei is also muscling in on territory formerly belonging to local infrastructure players like Ericsson, from whom the Chinese company just won over a service deal with large U.K. mobile provider, 3, owned by Hutchison Whampoa.

By making smartphone devices as well as providing the infrastructure, Huawei is thought to have a unique value proposition. By delivering devices running Android and soon Microsoft’s Windows 8, Huawei can put even more pressure on European incumbents like Nokia. Indeed, Huawei’s device business unit brought in 22 percent of the firm’s revenue last year.

While the move seems logical, it has also come as a result of pressure from the U.S. government, where congress recently released a report stating that the firm’s infrastructure posed an espionage risk. It’s not the first time Huawei has been accused of spy games, either. Australia banned the firm from participating in a national tender to build the country’s high-speed broadband network over “security concerns.”

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TAG:telecom huawei espionage