Detour Strategy
Huawei Technologies Co., a Chinese networking and telecommunications equipment and services company, is seeking to partner up with Korean information protection developers in order to push into Western markets.
According to industry sources on May 10, Huawei is giving positive consideration to use Korean security solutions in a bid to supply networking equipment to Western countries. To this end, the company recently had meetings with domestic information protection developers. In particular, Huawei Korea is a member of the Korea Information Security Industry Association (KISIA) under the Ministry of Science, ICT and Future Planning. After joining the KISIA in October last year, the company invited delegates from major members to the headquarters in China and had meetings with them. An official from the industry said, “We haven’t talked about specific plans. We just introduced products each other and reviewed the possibility of partnerships.”
The reason why Huawei seeks to join hands with Korean companies is that the company has difficulties to break into the Western markets, such as the U.S. and Europe, due to international affairs. Since 2013, it has had trouble in overseas expansion as doubts have risen in the U.S. and some European countries that Chinese intelligence agencies tap and overhear through Huawei’s networking equipment.
Similar doubts were brought up in Korea as well when LG U+ first introduced Huawei’s equipment. Huawei and the Chinese government denied the rumors several times and industry sources don’t think it is possible. However, politicians in Western countries still have doubts in Huawei.
In the U.S., Huawei can sell smartphones and tablets but restricted to participate in network establishment business with its equipment due to conerns over wiretapping and monitoring. However, the company has its own security solutions just like other equipment firms. Huawei’s next-generation firewall (USG6650) received the “recommended” rating in the Next-Generation Firewall (NGFW) Group Test conducted by NSS Labs. Recently, the company signed a comprehensive partnership agreement with China’s security company Meiyapico on cloud and big data security systems.
However, the company has been struggling to expand its business abroad due to continuous doubts over wiretapping and monitoring. So, it is seeking to cooperate with Korean security protection firms which are relatively favorable in overseas markets. Since only a small number of countries develop decent security solutions, such as the U.S., Korea and Israel, Huawei is considering partnership with Korean solution developers first due to the high possibility of agreement, according to industry watchers.