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Hot Topic NBR Focus: GMO
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Gen-i’s Quin coy on Telecom CEO rumour, still happy to talk to Huawei

Quin on the growing Huawei controvesy - and whether he sees the Chinese company as a potential competitor as it looks to expend beyond telecommunications and into the business market.

Chris Keall
Tue, 03 Apr 2012

Speaking at a the Auckland leg of a Gen-i roadshow yesterday, Telecom services division boss Chris Quin refused comment on persistent rumours the board will shortly anoint him CEO, replacing Paul Reynolds (due to leave before the end of June).

A buoyant Mr Quin said he could only confirm he was from Lower Hutt, had not won the $26 million Lotto jackpoint, and that he was still chief executive of Gen-i.

The Huawei situation was more awkward.

The Chinese company was one of two gold sponsors of the Gen-i roadshow even if it didn’t make a promo clip), whose Auckland leg attracted around 220 business customers. 

The H bomb
NBR caught up with Mr Quin shortly after he spoke.

Before the current controversy broke last week, a Huawei NZ insider told NBR the company wanted to move into the corporate networking space.

There are only so many phone and fibre companies to sell to. Selling networking gear and services to larger New Zealand companies was seen as a future area of growth.

Did Mr Quin see Huawei as a potential competitor, given its ambitions to move beyond the telecommunications market and into corporate IT services?

 “They’ve got the products and the capabilities so of course they will aspire to that,” he said.

So – a competitor, then?

“No, I’d say potential supplier, vendor partner. I don’t see them as a competitor,” the Gen-i boss said.

“We’re talking to them like everybody else.

“We haven’t done anything specific together yet. We’re learning about them and what their capabilities are.”

Will Gen-i be doing some harder study after the recent controversy, or did he feel his Telecom unit already had a good handle on Huawei?

“We’re not doing anything in particular with them. It’s interesting that people have declared very firm positions about that. They must have done the work," Mr Quin replied.

He waited a beat then added, "Or not."

Huawei manager Bernard Lee, who represented his company at the Gen-i roadshow, would not discuss the controversy over Huawei being blocked from bidding on Australia’s National Broadband Network reportedly following cyber-spying accusations made by ASIO (the Australian Security Intelligence Organisation).

The Australian government has also opened an investigation into a proposed Huawei Marine undersea cable between Singapore and Perth.

Mr Lee told Computerworld he was not allowed to speak on the topic.

Govt pushing hard toward shared services
Mr Quin told NBR he did not mention Huawei during his speech.

His immediate focus for the Gen-i roadshow was to discuss the benefits of businesses moving to fibre and cloud computing, and the government’s push toward sharing IT services between departments (in a bid to slice Crown spending through efficiencies, and bringing bulk-buying power to bear).

“The government is moving forward with its shared services programme pretty fast and as taxpayers we all like that,” Mr Quinn said

“From an industry point of view, there are big opportunities and big risks if you don’t engage well.”

Controversy builds
Gen-i's focus notwithstanding, the Huawei controversy shows no signs of abating.

The Australian government has also opened an investigation into a proposed Huawei Marine undersea cable between Singapore and Perth.

In the US, Congress has blocked Huawei from taking over networking company 3Com, and from bidding on a major telecommunications gear contract for Sprint.

“Increased government oversight” has also been blamed for the recent dissolution of a $US500 million joint venture between Huawei and US security company Symantec, and the withdrawl of Huawei employees from the US.

The New Zealand government has headed in the opposite direction, with (then) ICT Minister Steven Joyce leading a group of NZ tech companies, including 2degrees, on a trip to see Huawei and other Chinese companies in 2010; Prime Minister John Key cheerleading for Huawei; and Crown Fibre Holdings director Murray Milner accepting contract work from Huawei.

And while Gen-i has yet to do more than talk with Huawei, Telecom Retail – like Vodafone and 2degrees – is stocking the company’s handsets.

And Telecom CMO Jason Paris recently talked-up Huawei, including its efforts to co-develop mobile apps in conjunction with around 2000 Chinese universities.

Chorus – the networking division spun-off in November – recently took on Huawei as a second supplier, complementing its longstanding relationship with Alcatel Lucent.

Huawei will supply some fibre components in Chorus's leg of the public-private $300 million Rural Broadband Initiative (RBI).

Huawei is also 2degrees main network partner (and recently, through a $100 million credit line, main source of finance for network expansion), and a supplier of fibre, electronics and management services to Christchurch's Enable and central North Island winner Ultrafast Fibre under the government-backed Ultrafast Broadband UFB project.

In partnership with a second Chinese company, Axin, Huawei is also seeking to lay a cable between Auckland and Sydney which would compete with the 50% Telecom-owned Southern Cross Cable, and a link proposed by NZ start-up Pacific Fibre.

Chris Keall
Tue, 03 Apr 2012
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Gen-i’s Quin coy on Telecom CEO rumour, still happy to talk to Huawei