Huawei had plans to stage an IPO in the U.S
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...and East Looks West
While some Western startups are looking eastwards, China’s Huawei Technologies Co. Ltd. is planning to do the opposite –- ramp up its business in the West. The company says its international sales have doubled this year and it’s now making a big effort to capture work with Western European incumbent carriers. Once it’s achieved this goal, it will target the North American market, it adds.
In fact, Huawei is already preparing the ground for its push into the U.S.. Light Reading visited Huawei’s Shenzhen headquarters last week and was told (unofficially) that the company is negotiating a private placement of shares in the U.S..
Huawei already has a partnership with 3Com Corp. (Nasdaq: COMS - message board) targeting the enterprise networking market (see 3Com Taps Huawei in Enterprise Battle ) and is also working with various other U.S. vendors including Microsoft Corp. (Nasdaq: MSFT - message board) (see Huawei Teams With Microsoft ).
However, Huawei’s planned private placement of shares is probably linked to its efforts to form a partnership with an American equipment vendor targeting the carrier market. Light Reading has previously speculated that Tellabs Inc. (Nasdaq: TLAB - message board; Frankfurt: BTLA) might be a suitable ally (see Huawei on the Hunt ).
Huawei also told Light Reading last week that it has long had plans to stage an IPO in the U.S.. The timing is unclear. The last big Chinese IPO in the U.S. was that of China Telecommunications Corp. (NYSE: CHA - message board) in November 2002, according to an article in Red Herring, which says that a spate of IPOs by Chinese companies is now likely.
At present, Huawei is entirely owned by its staff. Stories about it being partially owned by the Chinese military are bogus, the company says. The biggest shareholder is Huawei’s founder, who owns less than three percent of the company, and was once in the Chinese army.
Further evidence of Huawei’s designs on the North American carrier market emerged during Light Reading's visit to Shenzhen. The company is bringing out Sonet multiservice provisioning platforms, in addition to SDH ones. Two new Sonet platforms –- the ONS 2500 and 3500 -– were on show in Huawei’s headquarters. At present, they haven’t been officially launched, the company says.
Finally, Huawei says another obstacle to its North American plans has pretty much been removed. Its spat with Cisco Systems Inc. (Nasdaq: CSCO - message board) over alleged copyright infringement is effectively over, even though it’s officially just on hold at the moment (see Cisco/Huawei Lawsuit on Hold ).
— Peter Heywood, Founding Editor, Light Reading
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