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Watch: U.S. Intel Chiefs Wary Of Huawei, ZTE Phones

Cite handsets’ potential as Trojan horses

The heads of America’s top intelligence agencies expressed alarm yesterday over close ties between Chinese telecoms Huawei and ZTE and China’s government, and warned of the potential for their phones and networking equipment to serve as conduits for espionage.

In testimony before the Senate Intelligence Committee, FBI director Christopher Wray said, “We’re deeply concerned about allowing any company or entity beholden to foreign governments that don’t share our values to gain positions of power inside our telecommunications networks.”

AT&T and Verizon have already relented to congressional pressure and dropped their plans to carry Huawei phones, including the company’s new Mate 10 Pro flagship.

That prompted Huawei division chief Richard Yu to lash out at U.S. mobile carriers during a CES keynote, in which he decried their control over 90 percent of handset distribution, and American consumers’ lack of choice.

Instead, the world’s No. 3 phone maker behind Samsung and Apple is launching an unlocked GSM version next week through Amazon, B&H Photo, Best Buy, Microsoft and Newegg, and the timing of the testimony couldn’t be worse.

See: Huawei Unlocks Mate 10 Pro

In response, Huawei suggested that the U.S. sanctions are protectionist in nature, and repeated Yu’s keynote argument that the company uses common production and global supply-chain channels; is no more a cyber-security risk than any other information and communications technology vendor; and is trusted by customers and governments in 170 countries.

ZTE, in a statement to CNN, said its phones and other devices use U.S.-made components, and that as a publicly-traded company, “We are committed to adhering to all applicable laws and regulations of the United States, work with carriers to pass strict testing protocols, and adhere to the highest business standards,” 

But Sen. Tom Cotton (R-AR) — who last week co-sponsored legislation with Sen. Marco Rubio (R-FL) that would prevent the government from buying or leasing Huawei or ZTE equipment — asked the FBI’s Wray and fellow CIA, NSA and National Intelligence directors, by a show of hands, if any would use products or services from the two companies, or recommend them to U.S. consumers.

No hands were raised by the intel chiefs.