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Hon Hai reneges on Huawei equipment purchase
Taiwan News, Staff Writer
2014-07-02 10:44 AM

Hon Hai (2317) has withdrawn Ambit Microsystems’ proposal to purchase 4G mobile communications equipment from Huawei. The company may elect to purchase equipment from Nokia, instead. In light of this development, concerns raised by the National Communications Commission (NCC) regarding Ambit’s sourcing of equipment from Huawei can finally be laid to rest.

According to reports, Hon Hai’s withdrawal of Ambit’s purchasing proposal is mainly geared towards accelerating 4G construction and the pace of the Asia Pacific Telecom (3682) merger.

Due to Huawei CEO Ren Zhengfei’s background as a former member of the People’s Liberation Army, Huawei has faced serious obstacles in the U.S. market and this sensitive subject has led to national security issues in Taiwan. Thus, Ambit’s purchasing proposal has been held up at the NCC for some time.

Industry analysis indicates, in addition to facing the fact that Taiwan’s three major telecoms have already introduced 4G service and a fourth, Taiwan Star, will announce service in July, Ambit and Asia Pacific’s merger still faces the three major obstacles of constructing 250 base stations, obtaining a license, and NCC approval of the merger. Even though Ambit and Asia Pacific have already signed a merger contract, to prevent a drawn out process prompting additional variables, Hon Hai has softened its stance and company chairman Terry Gou has backed down by withdrawing Ambit’s proposal to purchase Huawei equipment.

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