SOURCE: Five Star Equities
NEW YORK, NY--(Marketwire - Oct 11, 2012) - The Communication Equipment Industry will look to benefit from a recent ruling by the United States House Intelligence Committee disallowing Huawei and ZTE Corporation, China's leading telecom equipment producers, from the domestic telecom equipment market due to potential security issues. Five Star Equities examines the outlook for companies in the Communication Equipment Industry and provides equity research on Ericsson (NASDAQ: ERIC) and Tellabs, Inc. (NASDAQ: TLAB).
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A report from the House intelligence Committee suggests that the U.S. government should prevent acquisitions or mergers by Huawei and ZTE, and government agencies and contractors should cease using equipment made by the companies. It has yet to be seen if this report will have effect on Huawei and ZTE business in other countries.
"Huawei and ZTE seek to expand in the United States, but as a result of our investigation, we do not have the confidence that these two companies with their ties to the Chinese government can be trusted with infrastructure of such critical importance," the committee's chairman, Michigan Republican Mike Rogers, said.
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Ericsson is a world-leading provider of telecommunications equipment and services to mobile and fixed network operators. Over 1,000 networks in more than 180 countries use their network equipment, and more than 40 percent of the world's mobile traffic passes through Ericsson networks. The company recently acquired ConceptWave, a leading-edge software solutions company.
Tellabs is engaged in designing and marketing equipment and services to communications services providers. The company recently introduced the 100 Series Mini ONTs, the world's smallest enterprise ONTs. The first Tellabs 100 Series Mini ONTs are scheduled for release in the fourth quarter of 2012.
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