A man walks past a Huawei company logo outside the entrance of a Huawei office in Wuhan, Hubei province. Picture: REUTERS
A man walks past a Huawei company logo outside the entrance of a Huawei office in Wuhan, Hubei province. Picture: REUTERS

Hong Kong — Huawei’s deal with AT&T, for the US phone company to sell its phones, has collapsed at the eleventh hour, people with knowledge of the matter said.

This development is a major setback for the Chinese company’s global ambitions.

A second person familiar with the discussions said security concerns had arisen, without elaborating further.

AT&T was pressured to drop the deal after members of the US Senate and House intelligence committees sent a letter on December 20 to the Federal Communications Commission, citing concern about Huawei’s plans to launch consumer products through a major US telecoms carrier, online tech news site The Information reported.

Huawei told Reuters on Tuesday that its flagship premium smartphone Mate 10 Pro — Huawei’s challenge to the iPhone — would not be sold in the US via a telecoms carrier but only through open channels.

"The US market presents unique challenges for Huawei, and while the Huawei Mate 10 Pro will not be sold by US carriers, we remain committed to this market now and in the future," the electronics giant said in its statement.

Huawei was widely expected to announce a partnership with AT&T to distribute its phones in the US this year, said the people with knowledge of the matter, who declined to be identified as the talks were private.

AT&T declined to comment.

The Mate 10 Pro, launched in Europe in October with a price tag of €799, comes with AI-enhanced chips that Huawei, the world’s third-largest smartphone vendor, says process data faster than those used by Apple and Samsung.

But the collapse of the deal with AT&T, first reported by the Wall Street Journal, will mean Huawei will probably struggle to make a hit of its smartphones there as a US mobile carrier would typically promote the products as well as provide subsidies and special package deals.

In 2012, Huawei and ZTE were the subject of a US investigation that looked into whether the companies’ equipment provided an opportunity for greater foreign espionage and threatened critical US infrastructure — a link that Huawei has consistently denied.

Reuters

Please sign in or register to comment.