DESPITE a recent spell of protectionist and cyber security accusations, Huawei – one of the world's largest vendors of information and communication technology (ICT) solutions – has come out optimistic about the brand's continued leadership in the sector, including business expansions in the Saudi market over the coming year. Wu Weitao, CEO of Huawei Saudi Arabia, has confirmed that the company has continued to grow its employee base in the Middle East region during 2012 including the further extension of its Saudi headquarters in Riyadh, and expected to contribute to over $3 billion in annual regional contract sales in 2012. However, the past year has not been without its challenges. Beginning in late 2011, the US House Permanent Select Committee on Intelligence began what would be a year-long investigation into the US business interests of Chinese ICT companies –Huawei included – and their relationship with the Chinese government. This fall, the Committee announced a report indicating that Chinese intelligence services could spy on the US by using the companies' equipment, and that they should be barred from getting US contracts in future. For an entity like Huawei, which services more than one third of the world's population and gets more than 70 percent of its revenue from foreign markets outside China, the announcement was unfavorable to say the least – with the repercussions potentially extending to local shores. “We had hoped to ensure that the investigation would be fact-based and objective in its review of our business activities and the global issue of cyber-security,” Weitao noted. While the Committee stands by its findings in the report, those studying the case further and reading subsequent testimonies from international experts could easily make the case that ulterior motives may have played a role in the report's outcome. The fact is that almost every major ICT firm is conducting reach & development in countries across the globe – from China to Finland and Mexico. Additionally, many of these global firms share the same supply chains for software, processors, and other components. Commenting on the report, David Wolf, CEO of Wolf Group Asia – a Beijing-based technology consultancy – noted in a recent interview that “this is not a problem that is unique to Huawei...in fact if there is a problem, it's a problem with everybody. Telecommunication equipment manufacturers that make equipment under China would include about everyone in the industry.” “The challenge of ensuring cyber security is beyond a single company or country,” Weitao further said. He noted that any improper behavior would blemish the company's reputation in emerging markets such as KSA. “Huawei has not and will not jeopardize its global commercial success nor the integrity of its customers' networks for any third party; government or otherwise.” As a result of the significant increase in targeted cyber-attacks on enterprises in the Middle East, Huawei has actually seen a corresponding growth in demand for its own enterprise network security solutions – even receiving the “2012 Middle East Product Innovation Award” from international consultancy Frost & Sullivan for its work in the network security field. Since the release of the Committee's report this October, more and more experts have also voiced concern that the Committee's accusations may be intended to impede competition and obstruct foreign companies from entering into the US market at a time when competition has never been greater. In a recent commentary issued by global technology portal CNET, the group highlighted that as Huawei has grown, it has positioned itself as a low-cost alternative to many Western rivals. Mark Fabbi, a vice president of Research at analyst firm Gartner, said “Huawei has been extremely successful and disruptive around the world, but the one market it hasn't been able to penetrate is the US, and that's mainly because of politics and lobbyists pushing really, really hard to put up barriers.” Both the US Committee and Huawei are rightly focused on the increasing threats to the security of telecommunications networks and critical infrastructure. Within Saudi Arabia, such infrastructure has undoubtedly supported the social and economic progress that the country has enjoyed over the last decade; connecting homes, businesses, schools and other institutions across the country. While this “digital society” comes with great benefits, it clearly has its challenges as well, and addressing these will thus require open and honest dialogue in place of anti-competitive, protectionist policies. “With the hearing now behind us and the facts on the table, Huawei looks forward to working with key industry and government stakeholders – including those in the Middle East – to further clarify the history of our brand and how we can continue supporting the local ICT sector,” Weitao said. — SG
