Huawei Technologies will set up a joint venture with US security software maker Symantec Corp, a bold return into the $40-billion network security and data storage sector for China's top telecom equipment maker.

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The two firms are close to finalizing a deal, which could be announced as early as May, a source familiar with the negotiations said.

The joint venture would enable Huawei to compete with technology giants Hewlett-Packard, IBM and EMC.

Symantec, meanwhile, best known for its Norton anti-virus programs, has experienced weak revenue growth from its software that helps run corporate data storage centers, a business it acquired in July 2005, when it purchased Veritas Software, a US-based storage software maker, for $13.5 billion.

Symantec is betting the joint venture will help give its security and data management group a needed boost.

For Huawei, the partnership with Symantec marks the company's comeback to the enterprise communications market.

In 2003, privately-held Huawei formed a 51-49 joint venture with US-based 3Com, a maker of communications network equipment and software, called H3C. Huawei sold a 2 percent stake in the company to 3Com in 2005 for $28 million and the remaining 49 percent for $882 million late last year.

The sale marked Huawei's pull-out of the enterprise communications market. In 2006, however, the Shenzhen-headquartered firm established a line-up of storage and network security in preparation for a comeback, the industry source said.

"Huawei wants to ensure it has a complete product line-up in the enterprise sector," the source said.

The source would not disclose the size of the stake Huawei and Symantec will take in the planned joint venture or how much they will invest.

Representatives from Huawei and Symantec were not available for comment yesterday.

Shenzhen-headquartered Huawei recorded annual revenue last year of 65.6 billion yuan, with overseas sales accounting for 65 percent.

(China Daily 04/24/2007 page14)