EoW January 2013

Transatlantic Cable

† Huawei customers include many of the biggest tele- communications companies in Europe, among them BT and Vodafone, of Britain; Telefónica, of Spain; and Everything Everywhere, a partnership of France Télécom and Deutsche Telekom in Britain. The company’s equipment is in high demand, analysts told the Herald Tribune , as those companies strive to roll out next-generation wireless broadband networks. ZTE’s European telecommunications clients include KPN of the Netherlands. In Sweden, ZTE is working with Hutchison Whampoa of Hong Kong on a high-speed wireless network. † The world’s second-largest supplier of telecommunications network equipment, after Ericsson of Sweden, Huawei generated only four per cent of its $32.4 billion in revenue in 2011 in the United States. In contrast, Europe accounted for nearly 12 per cent of its revenue in the year, during which sales in the region rose 26 per cent, more than twice the company’s worldwide growth rate. According to Insight Research Corp (Mountain Lakes, New Jersey), spending on telecommunications services by the US healthcare industry increased by some 20 per cent over four years – from about $7 billion in 2008 to $8.3 in 2011. That is about half the rate projected for the next six years, and those numbers are expected to go even higher. Insight Research is looking for the US healthcare industry to boost its spending on telecommunications services by 9.7 per cent a year: from $9.1 billion in 2012 to a projected $14.4 billion in 2017. Reviewing these projections in the Cisco Systems technology newsletter Network (7 th October), Mary Ann Azevedo noted some factors that will drive the increased spending. These include continued growth in the healthcare industry as a whole, patients’ increased use of mobile devices, and the motivation for health organisations to meet federal guidelines that will make them eligible for nancial incentives while avoiding penalties. In addition, an aging population and healthcare worker shortages are pushing the industry to nd alternative approaches to current treatment practices. The report holds that the high costs in the current health care system are largely related to the “proximity of patient and provider,” as well as to the “archaic administrative systems used to manage records and exchange information.” The US healthcare industry has become a very big user of telecommunications services to manage patient care

Telecom

In bad odour in the US, Chinese suppliers Huawei and ZTE nd Europe to be a much friendlier place to do business “As a US congressional committee prepared to warn American telecommunications networks against buying from two Chinese suppliers, the founder of one of those companies was nding a warmer reception in London. There, he posed for photos with Prime Minister David Cameron in front of the replace at 10 Downing Street in London.” Eric Pfanner, the Paris-based media industry reporter of the International Herald Tribune , went on to note Mr Cameron’s declaration that Britain was “open for business.” Indeed, the British leader announced that his September guest, Ren Zhengfei, the chief executive of Huawei, had agreed to augment the company’s already sizable operations in Britain with an investment of $2 billion. Mr Pfanner observed that, given the typically close cooperation between the US and Britain on security issues, the transatlantic divide over Huawei and another Chinese equipment provider, ZTE, was striking. On 8 th October, the Intelligence Committee of the US House of Representatives branded both companies security threats. Chairman Mike Rogers warned American businesses to “ nd another vendor if you care about your intellectual property, if you care about your consumers’ privacy, and you care about national security.” Huawei rejected the allegations as “little more than an exercise in China bashing and misguided protectionism.” In contrast, said Roland Sladek, a spokesman for Huawei, “Europe is almost like a second home market” for us. (“Chinese Telecom Firm Finds Warmer Welcome in Europe,” 10 th October). And for good reason, wrote Mr Pfanner. Huawei means jobs and investment for Britain and, more broadly, for Europe. The company has 800 employees in Britain, many at its research centre in Ipswich. The investment announced by Mr Ren is expected to create 700 jobs in ve years and additional technical centres in the country. In all, Huawei has about 7,300 employees in Europe. Mr Cameron’s government has, however, taken a trust-but-verify approach to the relationship. Huawei has set up a Cyber Security Evaluation Centre in Banbury, England. There, its engineers work alongside o cials of Government Communications Headquarters, a British spy agency, to vet Huawei equipment for use in Britain.

Image: www.bigstockphoto.com Photographer Zsolt Ercsel

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January 2013