Thursday, 11 October 2012

Implications for M2M of Huawei and ZTE ban from the US

On Sunday a draft of the US House Intelligence Committee report on Chinese telecoms vendors became public reporting that they "cannot be trusted" to be free from state interference and so could be used to undermine US security. Story here.It also said that Huawei and ZTE kit, even components, should not be used in government systems or by contractors supplying the US government.

The prime implications of this clearly relate to core network infrastructure. However, extending the logic, if telecoms infrastructure can not be provided by Chinese vendors because the telecoms network is a key national asset, then the same must apply to some M2M. Smart grid implementations are clearly critical national infrastructure, but so too are connections related to healthcare, transportation and supply chain. Other than consumer electronics most of M2M could be considered in some way critical. With that in mind, will companies looking to buy M2M modules be willing to buy from either Huawei or ZTE? It will certainly be a difficult sell for the Chinese giants.

The impact of this is to strengthen the hand of Cinterion, Sierra and Telit in the US market. And it's also to guarantee that modules in the US will be more expensive than elsewhere in the world.

This is all slightly speculative but I can't believe it won't impact on Huawei and ZTE's ability to do business in the module space in the US.

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