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'Widely misunderstood' Huawei attempts to put the record straight, vows more transparency

Rimin Dutt | Oct. 25, 2012
Huawei Australia chairman, John Lord, has gone into extraordinary detail about the company’s ownership structure and history in an effort to address concerns about security risks of the company’s products.

Lord called for an "open and competitive" and a "universal, non-discriminatory approach" to Australia's critical infrastructure decisions.

"It was a virtual unknown to most Australians as recently as last year, despite the fact that over 50 per cent of Australians were already using Huawei technology for some part of their telecommunications needs," he said.

Lord said the company has done a "poor job of communicating" about itself. "For the majority of Huawei's 25-year existence we have been a business-to-business company with little need to 'sell ourselves' to the general public."

"Reading many media reports, you would get the impression that Huawei is in some sort of war with Australian security agencies -- we are not," he said.

He also made several references to a global supply chain in ICT sector and said calling any technology "foreign" or "local" is no longer accurate.

"The mobile phone in your own pocket could contain technologies from up to two dozen countries. The Apple iPhone wears the label "Designed by Apple in California -- Assembled in China". So is it an American device? Is it a Chinese device? It contains a touch screen from Japan, a processor from Korea, semiconductors from Germany, and intellectual property from across the world."

For Huawei's part, it sources 70 per cent of its materials from companies based outside China including Australia, he said. The US is the largest provider of its components, with almost a third of its materials sourced through 185 US suppliers; 22 per cent of its materials come from Taiwan, and 10 per cent from Europe, he said.

He also attempted to allay fears about accusations in the US that Chinese companies could resort to corporate espionage and steal intellectual property from American telco companies, by noting the growing number of patent applications the company has underway, and massive amounts of dollars it is putting in R&D.

"For too long, innovation leaders like Huawei have been labelled by outdated thinking that Chinese companies would rather steal intellectual property than produce it. The facts tell a different story," he said.

"Every year for the past five years, Huawei has been listed in the top five companies for new patent applications by the World Intellectual Property Organisation. In 2008, Huawei ranked at number one across all sectors in new patent applications. In total, Huawei holds over 26,000 innovation patents."

He urged that Australia must reap the benefits offered by the globalised ICT industry and "the innovation pouring out of Asia and China."

"As we enter the Asian Century, anything less would risk Australia being left behind," he said.


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