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AT&T, Vodafone bid for Huawei handset business?

The two mobile operators are supposedly one of several companies looking to buy a stake in Huawei's handset business.

AT&T and Vodafone could be eyeing Huawei's handset division, according to a story published Monday in the South China Morning Post.

The newspaper cited unnamed sources who said that phone companies AT&T and Vodafone had expressed interest in acquiring 50 percent of Huawei's handset division. Private equity firms Blackstone, TPG, and Kohlberg Kravis Roberts are also supposedly interested.

Huawei, based in China, is looking to spin off its mobile phone, laptop, wireless data-card, and home router businesses. Meanwhile, it will keep a 100 percent ownership in its network infrastructure business. The company doesn't publish separate revenue figures on its different businesses, but its handset business is believed to be profitable.

Vodafone already sells Huawei's phones, but AT&T doesn't offer the handsets in the U.S. A move by either mobile operator to become a handset maker is somewhat unusual. Typically, phone companies buy handsets from a wide range of suppliers.

But as handset manufacturers like Nokia, Research In Motion, and Apple build more sophisticated devices and services around their phones, carriers may feel pressure to push back with devices of their own.

As for Huawei, it's clear the company is looking to spread beyond the Chinese and Asian markets. The company had tried to take a stake in U.S. infrastructure provider 3Com. But its attempts were thwarted by U.S. politicians concerned over national security.

Even though a partnership with either service provider could provide broader reach for the handset division, Huawei could risk losing infrastructure business with competing carriers.