Chinese telecom company Huawei is planning to sell 51 percent of its undersea telecom cable subsidiary, a move that one expert said shows Huawei's inclination to alleviate some countries' security concerns about Huawei's involvement in the sector.
"Huawei hopes to ease the company's sensitivity by selling a business sector that is not so important to its overall business layout," Xiang Ligang, a telecom industry observer, told the Global Times Monday.
Hengtong Optic-Electric, based in East China's Jiangsu Province, plans to buy the stake in Huawei Marine Systems Co, Hengtong Optic-Electric disclosed in a filing Monday. Trading of Hengtong Optic-Electric' shares has been suspended.
The plan comes at a time when the US is raising security concerns about Huawei's undersea cables. The Trump administration has also blacklisted Huawei's equipment from the country's 5G infrastructure.
The Wall Street Journal in a March report cited US security officials as saying that undersea cables built by Huawei could be "vulnerable to espionage" by China.
"Huawei is already facing many doubts and accusations from overseas countries. I think the company is making efforts to lower the pressure and potential conflict that might be caused by their distrust," Xiang said.
According to a report of the Nikkei Asian Review in May, policymakers in the US, Japan and Australia are considering banning Huawei from laying cables connected to any of the three countries and persuading other governments to put Huawei on their blacklists for major cable construction projects.
"If Huawei transfers its undersea telecom cable business to another domestic company, the latter should face fewer obstacles when expanding its undersea telecom cable business overseas, compared with what Huawei might face. So such a transfer is, to a certain extent, beneficial for the development of China's undersea telecom cable business in general," Xiang said.
He said that some overseas media descriptions of the strategic importance of Huawei's undersea telecom cable business exaggerated the facts.
"This business sector is just a small supplement to Huawei's business, not Huawei's core business," he said.
The Nikkei Asian Review report described Huawei's undersea cable business an "ace in the hole", saying that Huawei is "chipping away" at Western control of the global undersea cable market.