Huawei earns Europe’s trust with ex­cel­lence in high-tech

With sales in the con­ti­nent grow­ing, tele­com ti­tan is set to meet its 2016 tar­get of 140 mil­lion hand­sets

China Daily (USA) - - FOCUS | BUSINESS - By AN­GUS MCNEICE andDAI TIAN in Lon­don Contact the writ­ers at an­gus@mail.chi­nadai­lyuk.com and daitian@chi­nadaily.com.cn

“This is the guts of the busi­ness, this is what we do,” our guide said, pat­ting a large green, hard­ware­filled street cab­i­net sit­ting in the bow­els of Huawei Tech­nolo­gies Co’s UK head­quar­ters in Read­ing.

To the av­er­age Bri­ton, Huawei is best known as a smart­phone man­u­fac­turer. Its ba­sic mod­els could be an al­ter­na­tive to pricey mar­ket lead­ers. Some are aware of the TV com­mer­cial for its higher end P9 fea­tur­ing movie stars Scar­lett Jo­hans­son andHenry Cav­ill.

But most would be un­aware that Huawei plays a key role in the “last mile” tech­nol­ogy that de­liv­ers su­per­fast broad­band from the pave­ment to some 20 mil­lion homes across the United King­dom.

“This is where it all be­gins, the kit that weath­ers rain or shine... If this doesn’t work, noth­ing else does.”

Re­li­able equip­ment and thrust on in­no­va­tion have helped Huawei to emerge as the world’s big­gest telecom­mu­ni­ca­tion equip­ment man­u­fac­turer, af­ter start­ing as a pri­vate re­seller of PBX switches in China in 1987.

Founded by Ren Zhengfei with Roland Mon­tagne, an in­vest­ment of $3,500, Huawei’s rev­enue reached $60.8 bil­lion in 2015. It’s the only Chi­nese com­pany in the For­tune 500 list to make more money abroad than do­mes­ti­cally.

The com­pany said it will likely meet its sales tar­get of 140 mil­lion hand­sets this year, driven by over 50 per­cent year-on-year growth in western and north­east­ern Europe, two of its fast-grow­ing markets.

Huawei is also the world’s third­largest smart­phone ven­dor af­ter Sam­sung Elec­tron­ics Co Ltd and Ap­ple Inc. The gap be­tween Ap­ple andHuawei is nar­row­ing.

Huawei’s mar­ket share was 8.2 per­cent in the first quar­ter of this year, up from 5.2 per­cent last year, while Ap­ple fell to 15.3 per­cent from 18.3 per­cent, with Sam­sung re­main­ing at around 24 per­cent, mar­ket re­search firm In­ter­na­tional Data July.

Both Ap­ple and Huawei are likely to ben­e­fit from Sam­sung’s ill-fated Galaxy Note 7.

An­a­lysts at­trib­uted Huawei’s suc­cess to its unique man­age­ment and own­er­ship struc­ture. Huawei is a 98.6 per­cent em­ployee-owned pri­vate en­tity run by ro­tat­ing CEOs. Em­pha­sis is on re­search, which re­ceived $38 bil­lion over the last 10 years and 45 per­cent of its 176,000 em­ploy­ees world­wide.

Ac­cord­ing to Roland Mon­tagne, head of broad­band prac­tice at Euro­pean tele­coms think tank IDATE, making inroads into Europe is at the heart of Huawei’s global rise.

“Huawei de­cided to in­vest quite early in the Euro­pean mar­ket be­cause it’s a cen­ter of ex­per­tise in terms of tech­nol­ogy and it is a dy­namic mar­ket,” he said. “That’s why they de­cided to col­lab­o­rate quite quickly with the main play­ers in Europe — BT, Or­ange, Tele­fon­ica, to men­tion a few.”

Af­ter set­ting up its first UK of­fices in 2003, Huawei clinched a game-chang­ing sup­plier deal with Bri­tish Tele­com in 2005, to roll out the lat­ter’s 21st Cen­tury Net­work data net­work pro­gram.

“At the time, very lit­tle was known about (Huawei) out­side of Asia, it didn’t really sell very much in Europe,” said Mike Galvin, head of tech­nol­ogy, ser­vices and op­er­a­tions at BT. “We com­pared Huawei’s with oth­ers’ equip­ment ... and Cor­po­ra­tion re­ported in we said this equip­ment meets our needs. It was well-made.”

Galvin said Huawei scored in terms of se­cu­rity of sup­ply and eth­i­cal prac­tices. He at­tribut­ed­mu­chof its suc­cess to cus­tomer cen­tric­ity.

“The unique thing ... (about) Huawei ... is how close they are to their cus­tomers and how their cus­tomers drive what prod­ucts they pro­duce.”

Ste­fano Cantarelli, chief tech­nol­ogy of­fi­cer and net­work vice-pres­i­dent forUKand Ire­land atHuawei, said gain­ing BT’s trust opened the doors to other ma­jor deals in the UK and Europe. Car­ri­ers Voda­fone and EE went on to buy Huawei equip­ment for their tele­com net­works. Huawei teamed up with EE later to launch the UK’s first 4G LTE(long term evo­lu­tion) net­work.

The BT deal sig­ni­fied the open­ing up of the tra­di­tional, R&D-driven Euro­pean op­er­a­tor mar­ket to Chi­nese ven­dors, Cantarelli said. “They (BT) have been fun­da­men­tal in es­tab­lish­ing trust, and we were able to get the sec­ond-big­gest deal we got with Voda­fone. It has been piv­otal in cre­at­ing a brand rep­u­ta­tion.”

Ac­cord­ing to Mon­tagne, main­tain­ing such trust is im­per­a­tive for Huawei as the new fron­tier of all­cloud trans­for­ma­tion and cloud­based strate­gies of­fer a fresh set of com­plex se­cu­rity chal­lenges.

Huawei de­cided to in­vest quite early in the Euro­pean mar­ket be­cause it’s a cen­ter of ex­per­tise ...” head of broad­band prac­tice at IDATE

AFP / LLUIS GENE

A woman tests Huawei Tech­nolo­gies Co's new Mate­book at the Mo­bile World Congress in Fe­bru­ary in Barcelona. Huawei is the world’s third-largest smart­phone ven­dor af­ter Sam­sung Elec­tron­ics Co Ltd and Ap­ple Inc.

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