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China's Huawei hit by last minute collapse of AT&T phone distribution deal

Reuters  |  HONG KONG 

By Sijia Jiang

(Reuters) - A deal under which U.S. carrier AT&Inc was to have sold made by Technologies Co Ltd has collapsed the eleventh hour, people with knowledge of the matter said, in a major setback for the Chinese firm's global ambitions.

A separate person familiar with the discussions said that security concerns had arisen without elaborating further.

AT&was pressured to drop the deal after members of the U.S. Senate and intelligence committees sent a letter on Dec. 20 to the citing concerns about Huawei's plans to launch through a major U.S. telecom carrier, online site The Information reported.

said in a statement to on Tuesday that its flagship premium Mate 10 Pro - Huawei's challenge to the - will not be sold in the via a but only through open channels.

"The U.S. market presents unique challenges for Huawei, and while the Mate 10 Pro will not be sold by U.S. carriers, we remain committed to this market now and in the future," the said in a statement.

was widely expected to announce a partnership with AT&to distribute its phones in the this year, said the people with knowledge of the matter, who declined to be identified as the talks were private. AT&declined to comment.

The Mate 10 Pro, launched in in October with a price tag of 799 euros ($955), comes with AI-enhanced chips that Huawei, the world's third largest vendor, says process data faster than those used by and

But the collapse of the deal with AT&T, first reported by the Wall Street Journal, will mean that will likely struggle to make a hit of its there as a U.S. would typically promote the products as well as provide subsidies and special package deals.

In 2012, and Corp were the subject of a U.S. investigation that looked into whether the companies' equipment provided an opportunity for greater foreign espionage and threatened critical U.S. infrastructure - a link that has consistently denied.

($1 = 0.8363 euros)

(Reporting by in Hong Kong; Additional reporting by Stephen Nellis in San Francisco, Anjali Athavaley in New York, David Shepardson in Washington, D.C. and Sonam Rai in Bengaluru; Editing by Edwina Gibbs)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, January 09 2018. 14:05 IST