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Huawei plans to sell its submarine telecom cable business. That’s what an application from a buyer who owns Reuters says. Hengtong Optic-Electric, a manufacturer of optical telecommunication products, is interested in the department of the Chinese company.

In its application for the Shanghai Stock Exchange, Hengtong Optic-Electric states that on 31 May it signed a letter of intent with Huawei Technologies’ subsidiary, Huawei Tech Investment, to purchase its 51 percent stake in Huawei Marine Systems through cash and share issuance. The cost of the Chinese company’s submarine cable activities is not known.

Submarine cables are the backbone of global Internet traffic. Huawei entered the market in 2008, dominated by the American SubCom, the Japanese NEC Corp and the European Alcatel-Lucent. This was done by the Chinese company with Huawei Marine, a partnership with the British Global Marine.

The subsidiary has now participated in ninety projects worldwide and laid a total of 50,361 kilometres of cables. This includes a 6,000-kilometre cable between Africa and South America, which was completed last September. Since August 2018, Huawei also owns the majority of the company’s board of directors. Huawei has not yet responded to the possible sale of the subsidiary.

Tensions VS

The possible sale comes amidst tensions between the Chinese manufacturer and the United States. The US suspects that Huawei is helping the Chinese government to spy on other countries through his equipment. The Chinese company has always denied that. However, last month the US decided to impose trade sanctions, preventing smartphone manufacturers from buying parts and components made in the US unless the US government authorises them to do so.

In March, US security officials also said that they believe that the suspected security risk could also affect Huawei Marine submarine cables.

Hengtong Optic-Electric

Hengtong Optic-Electric is for the most part owned by the Hengtong Group, which has a share of 15.66 percent. Cui Genliang, the founder and owner of the Hengtong Group, is the second largest shareholder with 14.95 percent. The company claims to be the largest provider of solutions for fibre optic networks and smart electricity networks in China. It has 70 subsidiaries in its home country and abroad.

The company has already laid 10,000 kilometres of undersea cables for projects in Chile, Bolivia and Mexico.

This news article was automatically translated from Dutch to give Techzine.eu a head start. All news articles after September 1, 2019 are written in native English and NOT translated. All our background stories are written in native English as well. For more information read our launch article.