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AT&T, Huawei urged to split by U.S. government

by Justin Herrick | January 16, 2018January 16, 2018 9:00 am PST

Stopping one of the nation’s largest carriers from selling the Mate 10 Pro was only the beginning. Now there’s an ongoing effort by the U.S. government to stop AT&T from doing any business at all with Huawei, a company long-rumored to be spying on behalf of the Chinese government. The two were set to introduce a high-end product in the U.S. last week until plans were canceled just hours before an official announcement at CES 2018.

AT&T, according to Reuters, is reportedly being urged to “cut commercial ties” to Huawei immediately amid “national security concerns.”

The Mate 10 Pro, first launched in Europe and Asia last year, and was set to be the company’s marquee product in the U.S. in 2018. Huawei reportedly had AT&T (and possibly Verizon) signed on to sell the phone, but right before anything became official the U.S. government intervened. AT&T listened, and the Mate 10 Pro was left alone at the alter.

Multiple reports suggest Congress and federal regulators were prepared to take action against AT&T had it followed through in selling the mobile device.

Huawei still plans on making a big push in the U.S. this year, but it just won’t be doing so with the help of a national carrier. The company will once again be going the unlocked route by selling its latest flagship through Amazon and Best Buy. Clearly, though, that isn’t enough to make the company a mainstream brand in a country where the market is dominated by a small number of key players. If Huawei doesn’t have the support of even just one U.S. carrier, it can’t ever expect to become trusted and well-regarded by the average consumer.

Without any major U.S. carrier on-board, it’s unknown if Huawei will still spend around $100 million promoting the Mate 10 Pro in a big-budget advertising campaign. AT&T, meanwhile, continues to receive pressure over its relationship with Huawei.

The U.S. government would like for the carrier to end co-development with the China-based company on its 5G network, and there’s been recommendation that AT&T’s Cricket Wireless should no longer sell Huawei-branded phones. Over the years, there have been numerous suspicions that Huawei collects user data and sends information to the Chinese government. In effect, Huawei is allegedly a spy acting as a business.

A bill introduced this week by two U.S. lawmakers aims to stop the government from contracting Huawei or ZTE, the latter of which is another telecommunications company from China often facing allegations relating to security and privacy.

Another layer of this story is AT&T’s interest in merging with Time Warner. The two companies are set to face immense pushback from the U.S. government, with most indications saying it has to do with Time Warner’s ownership of CNN.

There’s belief that, since the Trump administration would do anything to make this merger difficult, AT&T is better off avoiding additional conflict by removing the association with a controversial Chinese company. Now that it won’t be selling the Mate 10 Pro and contributing to a large ad campaign, AT&T can move forward with the Time Warner merger worrying about one less thing.

It’s definitely a situation far from being over. AT&T, while trying to merge with Time Warner, continues to do business with Huawei in other business-to-business areas while the Chinese company doesn’t intend to pull out of the U.S. despite losing carrier support. And we’re not even a month into 2018.

Reuters

Justin Herrick

Justin is easily attracted to power buttons. His interest in technology started as a child in the 1990s with the original PlayStation, and two...

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