US wary of rise of China telecoms
The US House of Representatives Intelligence Committee has warned US telecoms operators not to do business with China’s leading communications equipment makers.
However, the US telcos already were reticent to purchase equipment from the top Chinese firms, Huawei Technologies and ZTE, due to scrutiny from the American government, according to IHS.
“The US government has blocked numerous contracts and acquisition deals between American companies and Chinese equipment makers, usually in an indirect manner,” said Lee Ratliff, principal analyst for broadband and digital home research at IHS.
“Many US companies are hesitant to work with Huawei or ZTE. The only difference now is the US government has publicly issued its official findings regarding its investigation of the Chinese telecom equipment vendors,” said Ratliff.
Huawei and ZTE are unlikely to see their sales decline, the two companies are likely to see further delays in their bid to expand their business in the US telecom market, says IHS.
Huawei and ZTE’s inability to penetrate the US has not prevented them from rising to the top ranks in the global wireless communications infrastructure equipment market. Huawei during the first nine months of 2011 became the world’s largest supplier, with revenue of $8.9 billion and market share of 28.7%, as presented in the table attached.
The company had been in third place for the entire year of 2010, behind Ericsson and Nokia Siemens Networks.
ZTE ranked fifth during the first nine months of 2011, with revenue of $2.0 billion and market share of 6.4%t.