Chinese state-owned firm has supplied telecom gear in the West: report

As the row over Chinese technology giant Huawei’s role in fifth-generation (5G) networks rumbles on, some financial telecoms networks in the US and Europe regarded as critical to economic stability and national security are using hardware, patented technology, and software codes created by a company controlled by the Chinese government.

Shenzhen-listed Accelink Technologies Corporation, a company based in Wuhan, Hubei province, was formerly the Ministry of Posts and Telecommunications’ Research Institute for solid-state components.

Photo credit: Chatuporn Sornlampoo / 123RF

It has supplied signal-boosting laser amplifiers to some of the world’s largest financial centers for nearly a decade, according to a report seen by South China Morning Post. These components speed up data transmission, enabling high-frequency trades that can make millions of dollars in situations where milliseconds are critical.

The report, drafted this year by the China Institute of Telecommunications, a government-run association for scientists and engineers, identified some of the projects and the Western companies that use Accelink technology. They included high-speed financial data links between New York and Chicago, London, and Frankfurt. Some non-financial networks across Europe used Chinese components, although the report did not say which ones.

Accelink had supplied devices to Nokia, Infinera, Sanmina, and Flex, the document said. The number of laser amplifiers it had sold since 2008 was not revealed, but sales to Western networks were worth nearly US$80 million by the end of last year.

The impending roll-out of 5G networks across the globe was expected to increase that demand, according to industrial sources.

Accelink’s revenues rose fivefold between 2010 and 2018 to last year’s record 5 billion yuan (US$740 million), with a record 353 million yuan (US$52.4 million) in net profit in 2018.

Accelink is also a major supplier of amplifiers to Huawei, the world’s biggest optical transmission and network access equipment company.

Possessing what it claimed was the world’s most advanced technology for high-speed, large-volume data transmission, Accelink said its latest amplifiers could send a signal in a 400GB bandwidth network at a distance of 500 km non-stop: a world record.

In the past, some large fiber networks needed a repeating station every 80 km (50 miles) to move data, industry sources said, increasing construction costs and transmission delays.

Nokia said it had complete trust in Accelink.

The Finnish company, whose subsidiary Alcatel-Lucent also uses Accelink amplifiers, said: “Regardless of where Nokia’s products and services are manufactured or made, the same criteria are applied to ensure security and integrity, and a central team at our international headquarters verifies security status and compliance.”

Boosting an optical signal is a tricky business. The light running through the fiber needs to be as strong as possible to travel a long distance, but if it is too strong it could burn out the network. To balance performance and safety, scientists and engineers use sophisticated software to control the amplifier.