Huawei 'to sell' undersea cable business

UK Headquarters
(image credit: Huawei)
(Image credit: Image credit: Huawei)

Huawei plans to sell its undersea cable business as it continues to grapple with the implications of its US ban.

According to Reuters, Hengtong Optic-Electric Co Ltd has submitted a filing to the Shanghai Stock Exchange, outlining its intention to purchase Huawei’s 51 per cent stake in Huawei Marine.

Huawei Marine was formed with British firm Global Marine in 2008, with the Chinese partner gaining control over the joint venture in 2018.

Under the sea

To date it has built more than 90 cables, including the South Atlantic Inter Link (SAIL) between Africa and South America, and upgrading others such as the West Africa Cable System (WACS). This has helped it gain a footing in the market populated by more established competitors.

Huawei has not commented on the potential sale, but it comes weeks after US firms were effectively ordered to stop doing business with Huawei. This could mean that  the company’s future handsets may no longer receive updates for Google's Android operating system or access its popular applications.

The US government’s actions also make it significantly harder for Huawei to source components for its devices.

Huawei Marine

The company has effectively been frozen out of the US telecoms market due to fears that its equipment is a national security risk, allegations that Huawei has continually denied, but it has previously been reported that Washington is also concerned about the company’s subsea cable business.

The US is pressuring allies to follow its lead, despite the absence of any evidence to suggest any wrongdoing from Huawei, and the UK is carrying it out its own assessment. A report was expected to arrive in the Spring but has not yet materialised. Leaks suggested that operators will not be banned from using Huawei kit in the radio layer of their networks, but this has yet to be confirmed.

The issue is complicated by politics, with candidates for the Tory leadership split on the issue and the US suggesting it could limit intelligence sharing with the UK if it did not ban Huawei.

Foreign Secretary Jeremy Hunt told the BBC that it has been listening to America’s warnings and that no decision had yet been made.

“We haven’t made our final decision but we have also made it clear that we are considering both the technical issues - how you make sure there isn’t a backdoor so that a third country could use 5G to spy on us - but also the strategic issues so that you make sure that you are not technologically over-dependent on a third country for absolutely vital technology,” he is quoted as saying.

Via Reuters