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Huawei Technologies Co. Ltd.
Company typeEmployee-owned corporation[1]
IndustryTelecommunications
Founded1988
FounderRen Zhengfei
Headquarters,
RevenueIncrease $28 billion USD (2010)
47,515,000,000 renminbi (2016) Edit this on Wikidata
Increase $3.6 billion USD (2010)
Total assets443,634,000,000 renminbi (2016) Edit this on Wikidata
Number of employees
110,000 (2010) [2]
Websitehuawei.com

Huawei (officially Huawei Technologies Co. Ltd.) (simplified Chinese: 华为技术有限公司; traditional Chinese: 華為技術有限公司; pinyin: Huáwei Jìshù Yǒuxiàn Gōngsī) is a multinational networking and telecommunications equipment company headquartered in Shenzhen, People's Republic of China.[3] It is the largest networking and telecommunications equipment supplier in China and the second-largest supplier of mobile telecommunications infrastructure equipment in the world (after Ericsson).[4]

Huawei was founded in 1988 by Ren Zhengfei and is an employee-owned company. Its core activities are research and development (R&D), the production and marketing of telecommunications equipment, and the provision of customized network services to telecom carriers.[5]

Huawei serves 45 of the world's 50 largest telecoms operators and invests around 10 per cent of its annual revenues in R&D.[6] It has R&D centers in Beijing, Chengdu, Nanjing, Shanghai, Shenzhen, Wuhan and Xi'an, China; Ottawa, Canada; Bangalore, India; Jakarta, Indonesia; Mexico City, Mexico; Wijchen, Netherlands; Karachi and Lahore, Pakistan, Ferbane, Republic of Ireland; Moscow, Russia; Stockholm, Sweden; Istanbul, Turkey; and Dallas and Silicon Valley, United States.[7]

Name

(Chinese: 华为; pinyin: Huáwei) officially transliterates in English to Huawei (pronounced as "hwa way" in English). The character 华 means Chinese, but can also be used as an adjective to mean splendid or magnificent. The character 为 means action or achievement. The two characters combined (Huáwei) can be variously translated as "achievement", "magnificent act", "splendid act", or "China can".

History

Huawei Technology in Shenzhen, China

Early years

Huawei was founded by Ren Zhengfei in 1987, with an initial registered capital of RMB21,000.[8] Established in Shenzhen, Huawei started off as a sales agent for a Hong Kong company producing Private Branch Exchange (PBX) switches. By 1990, Huawei began its own independent research and commercialization of PBX technologies targeting hotels and small enterprises.[9] After accumulating knowledge and resources on PBX business, Huawei achieved its first breakthrough into the mainstream telecommunications market in 1992, when it launched its C&C08 digital telephone switch, which had the largest switching capacity in China at the time. By initially deploying in small cities and rural areas, the company gradually gained market share and made its way into the mainstream market.[10]

In 1994, Huawei established a long distance transmission equipment business, and launched its own HONET integrated access network, combining broadband and narrowband services in a single platform, and SDH product line. Huawei generated sales of RMB1.5 billion in 1995, mainly derived from rural markets in China.[9]

International expansion

In 1997, Huawei won its first overseas contract,[11] providing fixed-line network products to Hong Kong company Hutchison Whampoa.[10] Later that year, Huawei launched its wireless GSM-based products and eventually expanded to offer CDMA and UMTS. In 1999, the company opened a research and development (R&D) center in Bangalore, India to develop a wide range of telecom software.[9] From 1998 to 2003, Huawei contracted with IBM for management consulting, and underwent significant transformation of its management and product development structure. After 2000, Huawei increased its speed of expansion into overseas markets, having achieved international sales of more than US$100 million by 2000[11] and establishing an R&D center in Stockholm, Sweden. In 2001, Huawei established four R&D centers in the United States, divested non-core subsidiary Avansys to Emerson for US$750 million and joined the International Telecommunications Union (ITU). By 2002, Huawei’s international market sales had reached US$552 million.[9]

In 2004 Huawei continued its overseas expansion with a contract to build a third-generation network for Telfort, the Dutch mobile operator.[9] This contract, valued at more than $US25 million, was the first such contract for the company in Europe.[12]

In 2005, Huawei’s international contract orders exceeded its domestic sales for the first time. Huawei signed a Global Framework Agreement with Vodafone. This agreement marked the first time a telecommunications equipment supplier from China had received Approved Supplier status from Vodafone Global Supply Chain. The agreement established the terms and conditions for the supply of Huawei's solutions to any one of the Vodafone operating companies worldwide.[13] Huawei also signed a contract with British Telecom (BT) for the deployment of its multi-service access network (MSAN) and Transmission equipment for BT's 21Century Network (21CN), providing BT and the UK telecommunications industry with infrastructure necessary to support future growth.[14]

In May 2008, Huawei and Optus developed a mobile innovation centre in Sydney, Australia, providing facilities for engineers to develop new wireless and mobile broadband concepts into "ready for market" products.[15] In 2008, the company embarked on its first large scale commercial deployment of UMTS/ HSPA in North America providing TELUS's new next generation wireless network and Bell Canada with high-speed mobile access.[16]

Huawei delivered the world’s first LTE/EPC commercial network for TeliaSonera in Oslo, Norway in 2009. The company launched the world's first end-to-end 100G solution from routers to transmission system that same year, to help meet the rapid growth of network traffic and enhance router efficiency and reliability.[9]

In July 2010, Huawei was included in the Global Fortune 500 2010 list published by the U.S. magazine Fortune for the first time, on the strength of annual sales of US$21.8 billion and net profit of US$2.67 billion.[17] In late 2010 it was reported that Huawei is planning to invest around US$500 million (Rs 2,200 crore) to set up a telecom equipment manufacturing facility in Tamil Nadu, India and $US100 million to expand its R&D center in Bangalore.[18][19]

Investment and partnerships

Huawei has focused on expanding its mobile technology and networking solutions through a number of partnerships. In March 2003, Huawei and 3Com Corporation formed a joint venture company, 3Com-Huawei (H3C), which focused on the R&D, production and sales of data networking products. The company later divested a 49% stake in H3C for US$880 million in 2006. In 2005, Huawei began a joint venture with Siemens, called TD Tech, for developing 3G/ TD-SCDMA mobile communication technology products. The US$100 million investment gave the company a 49% stake in the venture, while Siemens held a 51% stake.[9] In 2007, after Nokia and Siemens co-founded Nokia Siemens Networks, Siemens transferred all shares it held in TD Tech to Nokia Siemens Networks. At present, Nokia Siemens Networks and Huawei hold 51% and 49% shares of TD Tech respectively.[20]

In 2006, Huawei established a Shanghai-based joint R&D center with Motorola to develop UMTS technologies.[9] Later that year, Huawei also established a joint venture with Telecom Venezuela, called Industria Electronica Orinoquia, for research and development and sale of telecommunications terminals. Telecom Venezuela holds a 65% stake while Huawei holds the remaining 35% stake.[21]

Huawei and American security firm Symantec announced in May 2007 the formation of a joint-venture company to develop security and storage solutions to market to telecommunications carriers. Huawei owns 51% of the new company, named Huawei Symantec Inc. while Symantec owns the rest. The joint-venture is based in Chengdu.[22]

Grameenphone Ltd. and Huawei won the Green Mobile Award at the GSMA Mobile Awards 2009.[23] In March 2009, the Wimax Forum announced four new members to its Board of Directors including Thomas Lee, the Vice Director of the Industry Standards Department at Huawei.[24]

In 2008, Huawei launched a joint venture with UK-based marine engineering company, Global Marine Systems, to deliver undersea network equipment and related services.[25]

Recent performance

In April 2011, Huawei announced an earnings increase of 30% in 2010, driven by significant growth in overseas markets, with net profit rising to RMB23.76 billion (US$3.64 billion; £2.23 billion) from RMB18.27 billion in 2009.[26] In 2010 sales outside China continued to be the main driver of Huawei’s business. Overseas revenue rose 34% to RMB120.41 billion in 2010 from RMB90.02 billion in 2009, fueled by regions including North America and Russia. Revenues from China rose 9.7% to RMB64.77 billion, as the country's big telecom operators reduced their investment last year.[27]

Huawei’s revenues of $78.56 billion in 2010 in the global carrier-network-infrastructure market put the company second behind the 19.6% share of Telefon AB L.M. Ericsson, according to market-research firm Gartner.[27]

Corporate leadership

Ren Zhengfei is the president of Huawei and has held the title since 1988.[28] Huawei disclosed its list of board of directors for the first time in 2010. Ms. Sun Yafang is chairman of the board. As of 2011, the members of the Board of Directors[29] are Ms. Sun Yafang,[30][31] Mr. Guo Ping, Mr. Xu Zhijun, Mr. Hu Houkun,[32] Mr. Ren Zhengfei,[33] Mr. Xu Wenwei, Mr. Li Jie, Mr. Ding Yun, Ms. Meng Wanzhou, Ms. Chen Lifang,[34] Mr. Wan Biao, Mr. Zhang Pingan, and Mr. Yu Chengdong.[29] The members of the Supervisory Board are Mr. Liang Hua, Mr. Peng Zhiping, Mr. Ren Shulu, Mr. Tian Feng, and Mr. Deng Biao.[35]

Products and services

Huawei is organized around three core business segments: Telecom Networks, building telecommunications networks; Global Services, offering global equipment, operational services, and consulting services for enterprise customers; and Devices, manufacturing electronic communications devices.[36]

In addition to its three core businesses, Huawei launched its Enterprise business in 2010 to provide network infrastructure, fixed and wireless communication, data center, and cloud computing solutions for global telecommunications customers.[37] Huawei has stated that it aims to increase enterprise sales to US$4 billion in 2011 and $15 billion within three to five years.[38][39]

As of the start of 2010, approximately 80% of the world's top 50 telecoms companies work with Huawei.[40] Prominent partners include BT,[41] Vodafone,[42][43] Motorola,[44][45] France Telecom,[46] T-Mobile, Cox Communications, Bell Canada, and Clearwire.[40] In May 2011, Huawei was awarded a contract with Everything Everywhere, the UK’s biggest communication company, to enhance its 2G network. The four-year deal is Huawei's first mobile network deal in the UK.[47]

Telecom Networks

Huawei offers a variety of network technologies and solutions to help telecommunications operators expand the capacity of their mobile broadband networks. Huawei’s core network solutions offer mobile and fixed softswitches, plus next-generation home location register and Internet Protocol Multimedia Subsystems (IMS). Huawei assists content service providers looking to migrate from copper to fiber with solutions that support xDSL, passive optical network (PON) and next-generation PON (NG PON) on a single platform. The company also offers mobile infrastructure, broadband access and service provider routers and switches (SPRS). Huawei’s software products include service delivery platforms (SDPs), BSSs, Rich Communication Suite and digital home and mobile office solutions.[48]

In 2010, revenues for Telecom Networks were US$18.79 billion.[49]

Global Services

Huawei Global Services provides telecommunications operators with equipment to build and operate networks as well as consulting and engineering services to improve operational efficiencies.[47] These include system integration services such as those for mobile and fixed networks; assurance services such as network safety; and learning services, such as competency consulting.[48]

In 2010, Huawei won 47 managed services contracts to help improve network performance and efficiency for customers, as well as reducing the costs of network operations and maintenance.[50] In 2010 Huawei's global services revenues grew 28.6% to US$4.82 billion.[51]

Huawei E220 HSDPA USB modem

Devices

Huawei's Devices division provides white-label products to content service providers, including USB modems, wireless modems, embedded modules, fixed wireless terminals, wireless gateways, set-top boxes, mobile handsets and video products.[52] Huawei also produces and sells a variety of devices under its own name, such as the IDEOS smartphones and tablet PCs. Recent smartphones include U8800, E220, Ascend, U7519, and U8150 In 2010, Huawei Devices shipped 120 million devices around the world.[36] 30 million cell phones, of which 3.3 million units were smartphones, were shipped to markets such as Japan, the United States and Europe.[53]

Huawei's Devices division grew 24.4% in 2010 to record US$4.7 billion revenue.[53]

Competitive position

Huawei Technologies Co Ltd, is the world's second-largest telecom equipment maker[54] and China’s largest telephone-network equipment maker.[55] As of 2008, Huawei ranked first in terms of global market share in the mobile softswitches market,[56] tied with Sony Ericsson for lead market share in mobile broadband cards by revenue,[57] ranked second in the optical hardware market,[58] stayed first in the IP DSLAM market,[59] and ranked third in mobile network equipment.[60] In 2009, Huawei was ranked No. 2 in global market share for radio access equipment.[61] In addition, Huawei was the first vendor to launch end-to-end (E2E) 100G solutions, enabling operators to establish enhanced ultra-broadband networks, improving their service and simplifying their network architecture.[62][63]

According to the World Intellectual Property Organization (WIPO) on 27 January 2009, Huawei was ranked as the largest applicant under WIPO's Patent Cooperation Treaty (PCT), with 1,737 applications published in 2008. Overall, the total number of international patent filings under WIPO's PCT for 2008 represents the highest number of applications received under the PCT in a single year and China improved its ranking by one place, to become the sixth largest user of the PCT, with 6,089 filings.[64] As of February 2011, Huawei has applied for 49,040 patents globally and has been granted 17,765 to date.[65]

Sales

Huawei's global contract sales for 2006 reached USD$11 billion (a 34% increase from 2005), 65% of which comes from overseas markets.[66][67] By the end of 2008, global contract sales of Huawei Technologies, China's largest telecoms gear maker, jumped 46 percent to USD$23.3 billion.[68] Huawei experienced sales exceeding USD$30 billion in 2009,[68][69] and global sales increased by 24 percent to 185.2 billion yuan in 2010.[70]

Recognition

Huawei Technologies was one of six telecom industry companies included in the World's Most Respected 200 Companies list compiled by Forbes magazine in May 2007.[71] In December 2008, BusinessWeek magazine included Huawei in their inaugural list of "The World's Most Influential Companies".[72]

In 2010 Fast Company ranked Huawei the fifth most innovative company in the world.[73] The same year, Huawei received three honors at the Global Telecom Business Innovation Awards including "Green base station innovation", "Wholesale network innovation" and "Consumer voting innovation" awards with Vodafone, BT and TalkTalk, respectively.[74] In 2010 Frost & Sullivan recognized Huawei as the 2010 SDM Equipment Vendor of the Year[75] and in the contact center application market with the 2010 Asia Pacific Growth Strategy Leadership Award.[76] On 29 July 2010, Huawei was recognized by British Telecom with Best in Class 21CN Solution Maturity, Value, Service and Innovation award, for its innovation and contribution in 21CN and Next Generation Access project.[77] Also in 2010 The Economist recognized Huawei with its Corporate Use of Innovation Award.[78] In May 2011 Huawei won two awards at the LTE World Summit 2011 for “Significant Progress for a Commercial Launch of LTE by a Vendor” and “Best LTE Network Elements.” As of May 2011, Huawei has deployed over 100 SingleRAN commercial networks, which are capable of evolving into LTE, and of those that have deployed SingleRAN networks, more than 40 operators have announced the launch or the imminent launch of distinct LTE services.[79]

Corporate social responsibility

As part of its international support for technology and telecommunications education and training, Huawei has contributed funding and equipment to a number of universities and training centers in countries such as Kenya,[80] India,[81] Indonesia,[82][83] Bangladesh,[84] and Nigeria.[81] In the U.S., since 2008, Huawei has sponsored MIT’s Communications Futures Program, a research collaboration that studies the future of the telecommunications industry.[85][86][87]

In 2010, Huawei joined the Broadband Commission for Digital Development, formed by the ITU and UNESCO to support broadband deployment to developing nations.[88][89][90] In the same year, Huawei joined the Green Touch consortium, an industry group which aims to make communications networks 1000 times more energy efficient than they are today.[91]

In June 2011, Huawei signed a five-year agreement to contribute donated services, equipment and technical expertise worth over US$1.4 million to Carleton University, in Ottawa, Canada, to establish a research lab dedicated to cloud computing technology and services.[92] The same month, Huawei published its 2010 Corporate Social Responsibility (CSR) Report.[93][94]

Criticisms and controversy

Alleged technology theft

In February 2003 Cisco Systems filed motion for preliminary injunction[95] against Huawei Technologies, quoting the defendant to be "engaged in blatant and systematic copying of Cisco's router technology". Cisco examined Huawei's operating system (VRP) and "found telltale signs that it was developed using Cisco's source code". In July 2004 Cisco, Huawei and 3Com filed a stipulation and order of dismissal with prejudice in the lawsuit filed by Cisco against Huawei in the United States District Court, Eastern District of Texas, Marshall Division, which means that Cisco can't bring another lawsuit against Huawei asserting the same or substantially similar claims.[96][97][98]

Huawei Technologies became the focus of a major intellectual property scandal again later in 2004, when a Huawei employee was examining and photographing circuit boards from a competitor's booth at the SuperComm tradeshow.[99] In February 2009, the President of Indonesian mobile carrier Excelcomindo Pratama accused a visiting Huawei employee of trying to steal data from his firm, but confirmed that no data was stolen. Huawei suspended the employee.[100][101] In July 2010, US-based mobile vendor Motorola Inc filed an amended complaint against Huawei claiming loss of confidential information to the Chinese company.[102]

Western security concerns

In 2005, the possibility of Huawei's bid on British telecommunications company Marconi has triggered a request from Conservative Party to UK government to "consider the implications for Britain's defense security".[103] Marconi was later acquired by Swedish telecommunications giant Ericsson. In March 2009, Alex Allan, the Chairman of Joint Intelligence Committee, has briefed members of UK government about the "threat", allegedly imposed by Huawei's equipment in British national telecom network BT.[104]

In 2008 Military Report to the Congress,[105] Pentagon stated that Huawei "maintains close ties" to Chinese People Liberation Army (PLA). In the same year, the proposed merger of US-based communications company 3COM Corp by Huawei met with US Congress investigation[106] and subsequent determination by Director of National Intelligence that "3Com-Huawei merger would undermine U.S. national security". In September 2009, Australian security agency ASIO started investigating the alleged links between local Huawei employees and the PLA.[107]

In October 2009, Indian Department of Telecommunications reportedly requested national telecom operators to "self-regulate" the use of Chinese-made equipment (including ZTE and Huawei), quoting security concerns.[108] Earlier, in 2005, Huawei was blocked from supplying equipment to India's national network BSNL.[109] In 2010, Indian security intelligence (CBI) insisted on canceling the rest of the Huawei contract with BSNL and pressed charges against several top BSNL officers regarding their "doubtful integrity and dubious links with Chinese firms".[110][111] In April 2010, Sistema Shyam Teleservices Ltd., the Indian unit of Russia's AFK Sistema, didn't get clearance to buy Huawei equipment.[112]

In May 2010, Huawei purchased US computer company 3Leaf systems for $2 million. Several months later in February 2011 this deal was blocked after a review by the US Committee of Foreign Investment citing security concerns based on their links to the Chinese army.[113]

Treatment of workforce and customers

The US Army's Strategic Studies Institute report on Argentina published in September 2007 describes Huawei as "known to bribe and trap clients". The report further details unfair business practices, such as customers framed by "full-paid trips" to China and monetary "presents" to be offered and later used by Huawei as "a form of extortion".[114] Huawei's also raises eyebrows in Africa, where Michael Joseph, the then-CEO of Safaricom Ltd struggled to cancel a deal soured by Huawei due to poor aftersales experience only to start receiving pressure from Kenyan government to reinstate the contract.[115] Telkom Kenya's CEO Sammy Kirui chose to describe the problem differently: "Chinese always does well in government contracts" - he said, in connection to fact that in 2007 his state-owned firm unlawfully awarded Huawei with a CDMA contract without the public tender.[116]

In October 2007, 7,000 Huawei employees have resigned and then rehired on new contracts, that they would not be bound by the unlimited contract provisions of the new Labour Contract Law. The company denied it was exploiting loopholes in the law, while the move was condemned by local government and trade unions.[117][118] Huawei's workforce treatment in Guangdong Province in Southern China also triggered media outcry after a 25 year-old software engineer by the name of Hu Xinyu, who worked for Huawei Technologies, died in May 2006 from what has been believed to have been "extreme fatigue caused by overwork". The cause of death listed by the hospital was bacterial encephalitis.[119][120]

In May 2010, security agencies in India became suspicious of Chinese Huawei employees after learning that part of Huawei's Bangalore R&D office building is off limits to Indians. The intelligence agencies also noted how Chinese employees of Huawei keep extending their stay in Bangalore for months on end. When security agencies launched an investigation to probe the purpose behind these long-drawn business trips by the Chinese staff of Huawei to Bangalore, they were told that the Chinese were staying on to learn and master English in India.[121]

See also

References

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