Surprise! Sprint Still Has Huawei in Its Network

News AnalysisDAN JONES, Mobile Editor1/25/2016


Sprint still has Huawei equipment in its wireless network, Light Reading has learned, despite promising US authorities three years ago that it would remove the Chinese vendor’s technology. 

The operator has confirmed it is currently using mobile broadband equipment from Huawei Technologies Co. Ltd. “The equipment all resides on the network we acquired from Clearwire [in 2013],” Sprint Corp. (NYSE: S) spokeswoman Adrienne Norton confirmed in an email to Light Reading earlier this month. 

This looks set to re-ignite the debate about the use of Chinese technology in US communications networks and is certain to attract the attention of US government departments and committees involved in national security issues. 

That’s because Sprint assured US government officials in March 2013 that it would not use Huawei equipment in its network and that any Huawei technology used by Clearwire, which Sprint was in the process of acquiring, would be replaced or removed. (See Sprint, Softbank: No Huawei in Our Network.) 

That vow was made by Sprint in order to gain approval for its acquisition of Clearwire and also to clear the path for its $21.6 billion merger with Japanese operator SoftBank Corp. : Both deals were duly approved and closed in July 2013. (See Softbank Closes on Sprint Acquisition and Sprint Completes Clearwire Acquisition.) 

Sprint was compelled to make that assurance because Huawei was one of the vendors cited in October 2012 as a security risk by the U.S. House Permanent Select Committee on Intelligence. Following a near year-long investigation, that Committee, chaired by Republican congressman Mike Rogers (now a CNN national security commentator), recommended that government contractors should exclude technology from Huawei and another Chinese telecoms equipment supplier, ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763), and noted that “network providers and systems developers are strongly encouraged to seek other vendors for their projects.” (See US vs Huawei/ZTE: The Verdict and Huawei, ZTE Get Grilled in US.) 

Naturally, both Huawei and ZTE refuted the findings, which also prompted a response from Chinese government officials. (See China Lashes Out at ‘Cold War Mentality’ and Huawei Hits Back.) 

But the message to the industry was clear: Companies wanting to do business with the US government should not do business with Huawei or ZTE, which, according to the Committee, could not be trusted “to be free of foreign state influence.” 

The news that Huawei equipment is still active in Sprint’s network could affect the service provider’s ability to hold on to or win government contracts. The operator, which is the fourth-largest US mobile operator with 57.9 million customers (as of September 2015), is not a major supplier to the federal government, but it does have a wireless services deal with the US General Services Administration, the US Navy, and the Post Office, amongst other deals.

So does Sprint still plan to replace the Huawei equipment, which comprises basestations and antennas? “We’re not commenting on timing,” Sprint’s Norton told Light Reading late last week. 

Huawei’s other US engagements
The news could also turn the spotlight on other major US operators that have done business with Huawei. Wholesale operator Level 3 Communications Inc.(NYSE: LVLT), for example, is believed to have sourced optical network transport technology from the Chinese company in 2009. (See Is Huawei in at Level 3?

Whilst that supplier relationship is thought to have been short-lived, a source close to Level 3 tells Light Reading that the operator still has Huawei equipment deployed in its core network. Level 3 had not yet responded to Light Reading requests for comment as this article was published. 

This doesn’t mean Huawei isn’t active in the US market. While the 2012 Intelligence Committee report acted as a significant barrier to doing business with the likes of AT&T Inc. (NYSE: T), Verizon Communications Inc. (NYSE: VZ), CenturyLink Inc. (NYSE: CTL) and T-Mobile US Inc. , the Chinese vendor has been securing deals with smaller, competitive operators seeking affordable network infrastructure. (See Huawei Working Hard for Rural Success.) 

— Dan Jones, Mobile Editor, Stephen Saunders, Founder and CEO, and Ray Le Maistre, Editor-in-Chief, Light Reading

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