Huawei sells its submarine cable business

Chinese Huawei has for many years struggled with suspicions and worries about the security of its network equipment, which recently resulted in its being placed on an American blacklist by the Trump government. Now, Huawei is officially disengaging from one industry by agreeing to divest its submarine cable business and reduce another by reducing smartphone orders with Foxconn.

Huawei Marine Systems, in which Huawei holds a 51% stake, installs fiber-optic submarine cables between continents, like Microsoft, Facebook and Google. It was created in 2009 and has installed more than 50,000 km of cables on 90 projects, according to its website. Recently, however, Huawei's reputation as an alleged facilitator of Chinese espionage has made it increasingly difficult for Huawei Marine Systems to win contracts because FT reports. Fergus Hanson of the Australian Strategic Policy Institute's International Cyber ​​Policy Center cites: "The environment is getting harder and harder when we try to negotiate agreements for cable construction because [Huawei] is so much in the limelight. "

Hengtong Optic-Electric, another Chinese company, is currently buying Huawei's share of the submarine cable business. It formalized the planned sale in a document filed on the Shanghai Stock Exchange. The price of the transaction has not been made public.

In other Huawei news, a report from the Morning of South China indicates that Foxconn, production and assembly partner of many smartphone manufacturers, "has stopped several Huawei phone production lines in recent days, as the Shenzhen company has reduced orders for new phones." This seems to be a direct response to Huawei's positioning on Trump The blacklist, which deprived the company of its Android license, has neutralized until until further notice the European trade of Huawei's Android smartphones.

the SCMP Foxconn had apparently hired new staff earlier in the year to help it cope with Huawei's growing demand. Huawei was indeed on the verge of becoming the world's largest smartphone provider by the end of 2019. This goal has now been achieved considerably thwarted by the retreat of the US ban and may even become impossible, in part. depending on the duration of the forced removal of Huawei by Google and other US partners.