EoW January 2013

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January 2013 22
Transatlantic Cable
Image: www.bigstockphoto.com Photographer Zsolt Ercsel
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 8th 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,” 10th 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.
† 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.
The US healthcare industry has become
a very big user of telecommunications
services to manage patient care
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 (7th 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.”