Chinese telecommunications companies ZTE and Huawei are under scrutiny from the US Government because of their ties to the Chinese government and military. Based in Shenzhen China, ZTE produces a range of telecommunications gear including GSM and CDMA telecom equipment and mobile phones. Though publicly traded, ZTE was formed from state-owned agencies associated with the Chinese Ministry of Aerospace and is still partly owned by the Chinese government.
Huawei is China’s largest telecommunications company and the #2 company in the world. Huawei raises suspicion as it is led by two former Chinese military officers, CEO Ren Zhengfei and Chariwoman Sun Ya-Fund. India, Australia, Britain, and the US are all investigating the company because of its alleged close military ties.
Last week, Senators Joseph Lieberman, Susan Collins and Jon Kyl, and Rep. Sue Myrick jointly petitioned the FCC and asked the regulatory agency to take a closer look at all wireless equipment coming into the US from ZTE and its competitor Huawei.
With its ties to the Chinese government and military, US officials are concerned that the equipment is compromised and poses a security threat:
“significant influence by the Chinese military which may create an opportunity for manipulation of switches, routers, or software embedded in American telecommunications network so that communications can be disrupted, intercepted, tampered with, or purposely misrouted.”
Competitor Huawei has been the focus of earlier security inquiries, but this the first time ZTE has been placed under the microscope in the US.
ZTE claims no wrong-doing and points out that it is a publicly traded company. It operates within the US and has plans to build a production facility stateside. To ease fears and avoid regulatory problems, ZTE is allowing its devices to be tested by third-parties and is offering its source code to the US government for scrutiny. Unlike Huawei, ZTE has no discernible military ties.
This timing for this investigation request is àpropos as the letter landed at the FCC in the weeks before Sprint was expected to decide the suppliers for its multibillion network upgrade. Huawei and ZTE have both bid for this job and their potentially tainted equipment could power the nations #3 wireless carrier. Anyone think the Senators are out of line or is it wise to closely scrutinize this incoming networking hardware?
[Via Wall Street Journal]