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Huawei ponders initial public offering to win over US

Looks to become more transparent
Fri Oct 05 2012, 13:05
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CHINESE TELECOMS EQUIPMENT VENDOR Huawei is considering floating an initial public offering (IPO) as it tries to win business in key markets such as the US.

Huawei, which has enjoyed rapid growth in the past decade, has come under increasing pressure to open up following persistent allegations that it has close ties to the Chinese government. Now the Wall Street Journal is reporting that the firm is courting investment banks to look at issuing an IPO in a bid to appear more transparent.

Huawei consistently has been barred from bidding for lucrative telecoms contracts in the US, and more recently Australia shut the door in its face, citing concerns over Huawei's alleged coziness with the Chinese government. The argument goes that Huawei's links to the Chinese government could lead to the interception of data, a train of thought that Huawei has consistently denied.

According to the Wall Street Journal's sources the firm is more serious than ever about an IPO, which could suggest that it is becoming increasingly desperate to break into new markets. However the firm might not gain all that much by going down the IPO route as increased market pressure could result in boardroom changes and a considerable amount of business information being made public, while it is unclear whether an IPO would lift the bans imposed in Australia and the US.

Huawei has often complained of being treated unfairly against western rivals and should it go down the IPO route, that certainly would help the firm promote a sense of openness, but it is very unlikely to change the view of the US government anytime soon. µ

 

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