Vodafone, AT&T Reportedly Interested in Huawei Handset Business Stake

• Posted: Tuesday, May 20, 2008
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• Author: pradhana
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• Filed under: Miscellaneous

By Lynnette Luna

Vodafone and AT&T are reportedly the possible buyers for a 50 percent stake in Chinese vendor Huawei Technologies' handset business, which the company offered for sale last week. Huawei is looking to raise some $2 billion from the sale. Huawei also wants to allay U.S. fears over security when it comes to operators dealing with the vendor and its Chinese owners.

According to the South China Morning Post, AT&T, Vodafone and a host of private equity firms that include Blackstone, TPG and Kohlberg Kravis Roberts have expressed interest. Why would AT&T and Vodafone, and by extension Verizon, be interested in Huawei's handset business?

As Nokia, Motorola and other handset vendors look to assert their individuality by marketing directly to consumers and offering their own branded services, companies like Vodafone are looking to step up with their own branded handset. Huawei's handset division is reportedly profitable, and the vendor is looking for more funds to increase its handset production to 50 million devices a year.

A major problem with granting an ownership stake to an operator, however, is whether other operators would want to buy devices from Huawei. [FierceWireless]

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