Huawei hit by last minute collapse of AT&T phone distribution deal

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Huawei Technologies Co Ltd's global ambitions suffered a major setback after a deal under which US carrier AT&T Inc was to have sold smartphones made by the Chinese firm has collapsed at the eleventh hour, people with knowledge of the matter said.

A separate person familiar with the discussions said that security concerns had arisen without elaborating further.

AT&T was pressured to drop the deal after members of the US Senate and House intelligence committees sent a letter on December 20 to the Federal Communications Commission citing concerns about Huawei’s plans to launch consumer products through a major US telecom carrier, online tech news site The Information reported.

Huawei said in a statement to Reuters on Tuesday that its flagship premium smartphone Mate 10 Pro – Huawei’s challenge to the iPhone – will not be sold in the United States via a telecoms carrier but only through open channels.

“The US market presents unique challenges for Huawei, and while the HUAWEI Mate 10 Pro will not be sold by US carriers, we remain committed to this market now and in the future,” the electronics giant said in a statement.

Visitors try Huawei's devices during Mobile World Congress in Barcelona, Spain, February 27, 2017. /Reuters Photo

Huawei was widely expected to announce a partnership with AT&T to distribute its phones in the United States this year, said the people with knowledge of the matter, who declined to be identified as the talks were private. AT&T declined to comment.

The Mate 10 Pro, launched in Europe in October with a price tag of 799 euros (955 US dollars), comes with AI-enhanced chips that Huawei, the world’s third largest smartphone vendor, says process data faster than those used by Apple and Samsung.

But the collapse of the deal with AT&T, first reported by the Wall Street Journal, will mean that Huawei will likely struggle to make a hit of its smartphones there as a US mobile carrier would typically promote the products as well as provide subsidies and special package deals.

In 2012, Huawei and ZTE Corp were the subject of a US investigation that looked into whether the companies’ equipment provided an opportunity for greater foreign espionage and threatened critical US infrastructure – a link that Huawei has consistently denied.

Source(s): Reuters