U.S. intelligence agencies are still warning against buying Huawei and ZTE phones

U.S. intelligence agencies are still warning against buying Huawei and ZTE phones

"And it provides the capacity to conduct undetected espionage". Later on in the hearing, however, the intelligence officials doubled down on their collective concerns and, when prompted, said they would not recommend that Americans use products or services from other company.

Taking matters a step further with regard to their fear of Chinese espionage through their smartphones, it's been reported that USA lawmakers are considering a new bill that would ban the US government from using any phones or products manufactured by Huawei or ZTE.

Texas Representative Mike Conaway introduced a bill last month that would prohibit the U.S. government from purchasing and using "telecommunications equipment and/or services", from Huawei and ZTE, which he says pose a threat to national security.

Huawei, for its part, tells CNBC that it "poses no greater cybersecurity risk than any ICT vendor". The chiefs - including the heads of CIA, FBI, NSA and the director of national intelligence - extended their concerns to the telecom company ZTE for the same reason.

Last week, Cotton and Republican Senator Marco Rubio introduced legislation that would block the government from buying or leasing telecoms equipment from Huawei or ZTE, citing concern the companies would use their access to spy on USA officials.

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Huawei has been trying to enter the USA market, first through a partnership with AT&T that was ultimately called off.

In 2012, Huawei and ZTE were the subject of a USA investigation into whether their equipment provided an opportunity for foreign espionage and threatened critical US infrastructure - something they have consistently denied.

"U.S. authorities used to make a distinction between telecom infrastructure and consumer devices; that line is now deliberately being blurred", said Avi Greengart, research director of consumer platforms and devices at GlobalData.

Huawei responded to the intelligence chiefs' comments with the following statement: "Huawei is aware of a range of USA government activities seemingly aimed at inhibiting Huawei's business in the US market". At the time, Huawei said its products would still launch on American markets. In January, Huawei chief executive Richard Yu slammed American carriers for leaving customers with fewer choices.

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