I found this temp fix
Run the following command at the console, prior to plugging in the modem to the 
USB slot;

watch -n1 sudo rmmod usb-storage

This would remove the usb_storage module, and would make the device not
detected as a USB storage device. From here I can connect to the
internet using the Network Manager's Mobile Broadband as I normally
would.

p/s: Do take note that this would make the system to not be able to detect any 
USB storage devices such as your thumb drives, till the rmmod command is killed.
It's working fine with me until a definitive fix is found

-- 
Several Huawei USB dongle don't work with kernel 2.6.31-12.40 (2.6.31.1 update 
related)
https://bugs.launchpad.net/bugs/446146
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