Aiming for the top

Huawei Technologies is working at becoming the top provider of networking solutions for the telecoms sector by focusing its energies on product R&D and investment in emerging markets.

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By  Sathya Ashok Published  July 24, 2007

"We want to become the Toyota of the telecoms industry in the next five to ten years. We want to grow our current business and work with customers worldwide and build ourselves as a true and established international firm that offers only the best in products, solutions and services to its customers worldwide," says Eric Xu, chief marketing officer for Huawei Technologies.

He makes the grand statement in one of the many conference rooms of the sprawling Huawei headquarters in Shenzhen, China. And it is easy to believe that he means exactly what he says.

Huawei Technologies is already a unique company by any standards. The 18 year old firm has had what most would term as a meteoric rise to its current position having established itself as one of the leading providers of networking infrastructure and solutions for a rapidly evolving global telecoms industry.

It has done so by being an extremely transparent entity, despite remaining a private firm. Every year, the company calls in KPMG to conduct an audit, the results of which are circulated to all its customers. It has remained open about its revenues and profit margins as well as opening up profit sharing options for its employees.

These efforts, combined with a strong focus on R&D and careful investment for growth in emerging markets, has made the company a force in its native China and a competitor to be reckoned with for vendors worldwide.

And the company shows no sign of slacking. With a dual focus on telecoms and enterprises, Huawei is targeting rapid growth in new markets to launch it to its next stage of economic development.

Areas of focus

"We believe that telecoms opportunities lie in mobile, broadband and the third is FMC (fixed mobile convergence). For mobile, there is continued interest among operators in moving from 2G to 3G and how to develop WiMAX in the future.

"Huawei actively promotes IP based broadband networks among telecoms operators. We will continue to apply our IP capability to provide comprehensive solutions for our customers, along with the best in services and move telecoms operators to go for an all IP network and then on to FMC," says Xu.

Huawei is also becoming a force in terminal manufacture for telecoms operators, especially Vodafone in Europe, with more than a million Huawei 3G handsets being shipped to the operator in the first quarter of this year alone. Huawei's strategy involves focusing on fast-growth and emerging markets with its solutions instead of entering into established markets such as the US. Regions of interest to the company include China, India, Brazil, Mexico, Russia, the Middle East and Africa.

"We have good relationships with most telecoms operators in the Middle East region. We have been working with Etisalat in the UAE for its 3G network. Huawei is working on building relationships with countries in the region that we don't already have one with. Turkey is one of these countries and we will focus on our business in the country in the near future," says Xu.

According to him, the Middle East constitutes around 6.7% of the total world revenues of the company, but is predicted to increase in the next five years time. In Africa, where the company has had huge success, Huawei will focus on sustaining its position and moving to the next level of growth.

Enterprise solutions

Even as the firm focuses on the telecoms sector, the enterprise segment continues to contribute a small portion of its revenues, albeit a growing one.

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