Verizon is under pressure to scrap its plans with a Chinese tech company after Congress has expressed concerns that the Chinese-made smartphones coming to the U.S. are actually being used by China to spy and gain access to business information.
Chinese tech giant Huawei had high hopes in bringing their latest smartphones to the U.S. market this year. Carrier providers like AT&T and Verizon planned on offering Huawei’s latest devices, including their flagship Mate 10 Pro smartphone, for the first time.
However, citing national security concerns, pressure from Congress may have effectively ended any chance Huawei had at introducing its products in the United States.
U.S. lawmakers urged AT&T in early January to cut commercial ties to the Chinese phone maker and to also oppose plans by telecom operator China Mobile Ltd. to enter the U.S. market. AT&T recently stated that they won’t be carrying any Huawei devices at all, and even discussed plans on ending their collaboration with Huawei on next-generation 5G network technology.
Verizon now faces immense pressure to follow suit. The top service provider in the country intended to sell Huawei smartphones this summer, but their deal with Huawei might also end after political pressure from the likes of Congress.
Michael Wessel, a member of a U.S.-China security review commission, recently expressed his concerns on China introducing certain products to the U.S.
“The next wave of wireless communication has enormous economic and national security implications,” he said. “China’s participation in setting the standard and selling the equipment raises many nationally security issues that demand strict and prompt attention.”
Congress has proposed a bill that would eliminate any possibility of a government agency working with Huawei, citing spying concerns. The bill references the CIA, NSA, FBI and other agencies that discovered Huawei had shared sensitive information with China. Chinese security agencies can allegedly gain access to private U.S. business communications via Huawei’s products.
Furthermore, while the U.S. government cannot necessarily force companies like AT&T and Verizon to end their deals, Congress has suggested that working with Huawei, China Mobile and other firms could harm U.S. companies’ ability to procure government contracts. AT&T and Verizon have been given billions of dollars in long-term government telecommunication projects over the years.
Huawei, ZTE and other Chinese tech companies have battled Congress since 2012 in their quest to gain a larger share of the U.S. markets. Huawei in particular has stated that their equipment contains no backdoors that would threaten U.S. security, and they have even gone on record to suggest U.S. companies like Cisco are more of a security concern.
The issue drew the attention of the Chinese foreign ministry, which said that “we hope that China and the United States can work hard together to maintain the healthy and stable development of trade and business ties.”
