Huawei to offload undersea cable business: report
Reuters reports that Hengtong Optic-Electric will buy Huawei’s stake in Huawei Marine
Huawei plans to sell its undersea telecom cable business, Reuters has reported.
Chinese Hengtong Optic-Electric Co Ltd, an optical telecommunication network products company based, said in the filing to the Shanghai Stock Exchange that it signed a letter of intent with Huawei Technologies subsidiary Huawei Tech Investment Co Ltd on May 31 to buy its 51% stake in Huawei Marine Systems Co Ltd via cash and share issuance.
The potential sale comes as the United States government continues to target the company over accusations the tech giant could be used by the Chinese government for espionage.
In March, The Wall Street Journal cited U.S. security officials as saying the suspected security risk extended to undersea cables built by Huawei Marine.
Undersea cables are the backbone of global internet traffic. Huawei has been gaining share in the market dominated by U.S. firm SubCom, Japan’s NEC Corp and Europe’s Alcatel-Lucent, since Huawei Marine was established in 2008 as a joint venture with Britain’s Global Marine.
According to Reuters, Huawei Marine has participated in 90 projects worldwide and built 50,361 kilometers (31,293 miles) of cables, including a 6,000 km cable connecting Africa and South America for the first time completed in September last year.