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|Products||Mobile and fixed broadband networks, consultancy and managed services, multimedia technology, smartphones, tablet computers|
|Revenue||CNY 185.176 billion (2010)|
|47,515,000,000 renminbi (2016)|
|CNY 28.458 billion (2010)|
|Total assets||443,634,000,000 renminbi (31 December 2016)|
Number of employees
|110,000 (2010) |
Huawei (officially Huawei Technologies Co. Ltd.) is a Chinese multinational networking and telecommunications equipment and services company headquartered in Shenzhen, Guangdong, China. It is the largest China-based networking and telecommunications equipment supplier and the second-largest supplier of mobile telecommunications infrastructure equipment in the world (after Ericsson).
Huawei was founded in 1987 by Ren Zhengfei and is a private company owned by its employees. Its core activities are building telecommunications networks; providing operational and consulting services and equipment to enterprises; and manufacturing communications devices for the consumer market. Huawei has over 110,000 employees, around 46% of whom are engaged in research and development (R&D). It has 20 R&D institutes in countries including China, Germany, India, Russia, Sweden and the United States, and in 2010 invested CNY 16,556 million in R&D.
In 2010, Huawei recorded revenues of US$28 billion. Its products and services have been deployed in more than 140 countries and it currently serves 45 of the world's 50 largest telecoms operators.
- 1 Name
- 2 History
- 3 Corporate leadership
- 4 Products and services
- 5 Competitive position
- 6 Corporate social responsibility
- 7 Controversy and response to criticism
- 8 See also
- 9 References
- 10 External links
(Chinese: 华为; pinyin: Huáwéi) officially transliterates in English to Huawei. The character 华 means "splendid" or "magnificent", but can also mean "China". The character 为 means "action" or "achievement". The two characters combined (Huáwei) can be variously translated as "achievement", "magnificent act", or "China is able".
Huawei was founded by Ren Zhengfei in 1987, with an initial registered capital of RMB21,000. 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. 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.
In 1994, Huawei established a long distance transmission equipment business, and launched its own SONET 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.
In 1997, Huawei won its first overseas contract, providing fixed-line network products to Hong Kong company Hutchison Whampoa. 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. 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 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.
In 2004 Huawei continued its overseas expansion with a contract to build a third-generation network for Telfort, the Dutch mobile operator. This contract, valued at more than $US25 million, was the first such contract for the company in Europe.
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. 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.
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. 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.
Huawei delivered one of the world’s first LTE/EPC commercial networks 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.
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. 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.
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. 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.
In 2006, Huawei established a Shanghai-based joint R&D center with Motorola to develop UMTS technologies. 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.
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.
Grameenphone Ltd. and Huawei won the Green Mobile Award at the GSMA Mobile Awards 2009. 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.
In 2008, Huawei launched a joint venture with UK-based marine engineering company, Global Marine Systems, to deliver undersea network equipment and related services.
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. 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.
Huawei's revenues in 2010 accounted for 15.7% of the $78.56 billion global carrier-network-infrastructure market, putting the company second behind the 19.6% share of Telefon AB L.M. Ericsson, according to market-research firm Gartner.
Ren Zhengfei is the president of Huawei and has held the title since 1988. 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 are Ms. Sun Yafang, Mr. Guo Ping, Mr. Xu Zhijun, Mr. Hu Houkun, Mr. Ren Zhengfei, Mr. Xu Wenwei, Mr. Li Jie, Mr. Ding Yun, Ms. Meng Wanzhou, Ms. Chen Lifang, Mr. Wan Biao, Mr. Zhang Pingan, and Mr. Yu Chengdong. The members of the Supervisory Board are Mr. Liang Hua, Mr. Peng Zhiping, Mr. Ren Shulu, Mr. Tian Feng, and Mr. Deng Biao.
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.
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. Huawei has stated that it aims to increase enterprise sales to US$4 billion in 2011 and $15 billion within three to five years.
As of the start of 2010, approximately 80% of the world's top 50 telecoms companies work with Huawei. Prominent partners include BT, Vodafone, Motorola, France Telecom, T-Mobile, Portugal Telecom, Cox Communications, Bell Canada, and Clearwire. 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.
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.
In 2010, revenues for Telecom Networks were US$18.79 billion.
Huawei Global Services provides telecommunications operators with equipment to build and operate networks as well as consulting and engineering services to improve operational efficiencies. 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.
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. In 2010 Huawei's global services revenues grew 28.6% to US$4.82 billion.
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. Huawei also produces and sells a variety of devices under its own name, such as the IDEOS smartphones and tablet PCs. Recent products include U8800, E220, Ascend, U7519, and U8150. In 2010, Huawei Devices shipped 120 million devices around the world. 30 million cell phones, of which 3.3 million units were smartphones, were shipped to markets such as Japan, the United States and Europe.
Huawei's Devices division grew 24.4% in 2010 to record US$4.7 billion revenue.
Huawei Technologies Co Ltd, is the world's second-largest telecom equipment maker and China’s largest telephone-network equipment maker. As of 2008, Huawei ranked first in terms of global market share in the mobile softswitches market, tied with Sony Ericsson for lead market share in mobile broadband cards by revenue, ranked second in the optical hardware market, stayed first in the IP DSLAM market, and ranked third in mobile network equipment. In 2009, Huawei was ranked No. 2 in global market share for radio access equipment. 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.
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. As of February 2011, Huawei has applied for 49,040 patents globally and has been granted 17,765 to date.
Huawei's global contract sales for 2006 reached US$11 billion (a 34% increase from 2005), 65% of which comes from overseas markets. By the end of 2008, global contract sales of Huawei Technologies, China's largest telecoms gear maker, jumped 46 percent to US$23.3 billion. Huawei experienced sales exceeding US$30 billion in 2009, and global sales increased by 24 percent to 185.2 billion yuan in 2010.
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. In December 2008, BusinessWeek magazine included Huawei in their inaugural list of "The World's Most Influential Companies".
In 2010 Fast Company ranked Huawei the fifth most innovative company in the world. 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. In 2010 Frost & Sullivan recognized Huawei as the 2010 SDM Equipment Vendor of the Year and in the contact center application market with the 2010 Asia Pacific Growth Strategy Leadership Award. 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. Also in 2010 The Economist recognized Huawei with its Corporate Use of Innovation Award. 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.
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, India, Indonesia, Bangladesh, and Nigeria. 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.
In 2010, Huawei joined the Broadband Commission for Digital Development, formed by the ITU and UNESCO to support broadband deployment to developing nations. 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.
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. The same month, Huawei published its 2010 Corporate Social Responsibility (CSR) Report.
Controversy and response to criticism
Intellectual property rights
In February 2003 Cisco Systems sued Huawei Technologies for allegedly infringing on its patents and illegally copying source code used in its routers and switches. According to statement by Cisco, by July 2004 Huawei removed the contested code, manuals and command-line interfaces and the case was subsequently dropped. Interestingly enough, both sides claimed success - with Cisco asserting that "completion of lawsuit marks a victory for the protection of intellectual property rights", and Huawei's partner 3Com (which was not a party of lawsuit) noting that court order prevented Cisco from bringing another case against Huawei asserting the same or substantially similar claims. Although Cisco employees allegedly witnessed counterfeited technology as late as Sep 2005, in a retrospective Cisco's Corporate Counsel noted that "Cisco was portrayed by the Chinese media as a bullying multi-national corporation" and "the damage to Cisco's reputation in China outweighed any benefit achieved through the lawsuit".
In June 2004 a Huawei employee was caught afterhours diagramming and photographing circuit boards from a competitor booth at the SuperComm tradeshow. The employee denied the accusation, but was later dismissed.
In July 2010, Motorola filed an amended complaint that named Huawei as a co-defendant in its case against Lemko for alleged theft of trade secrets. The case against Huawei was subsequently dropped in April 2011. In January 2011, Huawei filed a lawsuit against Motorola to prevent its intellectual property from being illegally transferred to Nokia Siemens Networks ("NSN") as part of NSN’s US$1.2 billion acquisition of Motorola's wireless network business. In April 2011, Motorola and Huawei entered into an agreement to settle all pending litigation, with Motorola paying an undisclosed sum to Huawei for the intellectual property that would be part of the sale to NSN.
In a further move to protect its intellectual property, Huawei filed lawsuits in Germany, France and Hungary in April 2011 against ZTE for patent and trademark infringement. The following day, ZTE countersued Huawei for patent infringement in China.
In the US, Huawei has been challenged due to concerns of U.S. security officials that Huawei-made telecommunications equipment is designed to allow unauthorized access by the Chinese government and the Chinese People's Liberation Army, given that Ren Zhengfei, the founder of the company, served as an engineer in the army in the early 1980s. In the UK, the Conservative Party raised concerns about security over Huawei’s bid for Marconi in 2005, and the company's equipment was mentioned as an alleged potential threat in a 2009 government briefing by Alex Allan, chairman of the Joint Intelligence Committee. In December 2010, Huawei opened a Cyber Security Evaluation Centre where its hardware and software solutions will be tested to ensure their ability to withstand growing cyber security threats. In the U.S., some members of Congress raised questions about the company's proposed merger with communications company 3Com in 2008, and its bid for a Sprint contract in 2010. In addition, Huawei withdrew its purchase of 3Leaf systems in 2010, following a review by the U.S. Committee on Foreign Investment (CFIUS).
In a 2011 open letter, Huawei stated that the security concerns are “unfounded and unproven” and called on the U.S. government to investigate any aspect of its business. The US-based non-profit organization Asia Society carried out a review of Chinese companies trying to invest in the U.S., including Huawei. The organization found that only a few investment deals were blocked following unfavorable findings by the CFIUS or had been given a recommendation not to apply, however all large transactions had been politicized by groups including the U.S. media, members of Congress and the security community.
In October 2009, the Indian Department of Telecommunications reportedly requested national telecom operators to "self-regulate" the use of all equipment from European, U.S. and Chinese telecoms manufacturers following security concerns. Earlier, in 2005, Huawei was blocked from supplying equipment to India's Bharat Sanchar Nigam Limited (BSNL) cellular phone service provider. In 2010, the Indian Central Bureau of Investigation (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". In April 2010, Sistema Shyam TeleServices Limited, the Indian unit of Russia's AFK Sistema, didn't get clearance to buy Huawei equipment.
In June 2010, an interim solution was introduced that would allow the import of Chinese-made telecoms equipment to India if pre-certified by international security agencies such as Canada’s Electronic Warfare Associates, US-based Infoguard, and Israel’s ALTAL Security Consulting.
In October 2011, the Wall Street Journal reported that Huawei had become Iran's leading provider of telecommunications equipment, including monitoring technologies that could be used for surveillance. Huawei responded with a statement claiming the story misrepresented the company's involvement: "We have never been involved and do not provide any services relating to monitoring or filtering technologies and equipment anywhere in the world".
In December 2011, Bloomberg reported that The U.S. is invoking Cold War-era national-security powers to force telecommunication companies including AT&T Inc. and Verizon Communications Inc. to divulge confidential information about their networks in a hunt for Chinese cyber-spying. The action represents a concern that China and other countries may be using their growing export sectors to develop built-in spying capabilities in U.S. networks. The U.S. House Permanent Select Committee on Intelligence said it would investigate potential security threats posed by some foreign companies, and mentioned Huawei specifically. A spokesman for Huawei said that the company conducts its businesses according to normal business practices and actually welcomed the investigation.
In 2001, it was alleged that Huawei Technologies India had developed telecommunications equipment for the Taliban in Afghanistan, and newspapers reported that the Indian government had launched a probe into the firm's operations. Huawei responded, stating that the company did not have "any link with the Taliban", as its only customers are telecommunications carriers and its facilities "always operate according to U.N. rules and the local laws of each country". On December 15, 2001, the Indian authorities announced that they had not found any evidence that Huawei India had any connection to the Taliban, although speculation to the contrary has persisted in the U.S.
Treatment of workforce and customers
A U.S. Army 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".
According to a WikiLeaks cable, in 2006, Michael Joseph, then-CEO of Safaricom Ltd, allegedly struggled to cancel a contract with Huawei due to poor after-sales experience, following which he received pressure from the Kenyan government to reinstate the contract. When questioned regarding this incident, Joseph replied, “It [the cable] is not a reflection of the truth as evidenced by Safaricom being a major purchaser of Huawei products including all 3G, switching and the recent OCS billing system upgraded over the weekend.” According to the WikiLeaks cable, Telkom Kenya's CEO Sammy Kirui stated, "the Chinese always do well in government contracts".
In May 2010, it was reported in the Times of India, that security agencies in India became suspicious of Chinese Huawei employees after learning that Indian employees allegedly did not have access to part of Huawei's Bangalore research and development (R&D) office building. Huawei responded that the company employs over 2,000 Indian engineers and just 30 Chinese engineers in the R&D center in Bangalore, and "both Indian and Chinese staff have equal access rights to all our information assets and facilities". According to the Times of India, the intelligence agencies also noted that Chinese employees of Huawei had extended their stay in Bangalore for many months. Huawei stated that many of these employees were on one-and-a-half year international assignments to serve as a technical bridge between in-market teams and China, and that "all the Chinese employees had valid visas and did not overstay".
In October 2007 seven thousand Huawei employees resigned and were then rehired on short-term contracts, therefore apparently avoiding the unlimited contract provisions of China's 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.
Huawei's treatment of its workforce in Guangdong Province, Southern China also triggered a media outcry after a 25 year-old software engineer, Hu Xinyu, died in May 2006 from what is believed to have been "extreme fatigue caused by overwork", according to a report by CBC News. The cause of death listed by the hospital was bacterial encephalitis.
In its 2010 Corporate Social Responsibility report, Huawei highlighted the importance of employee health and safety. In 2010, Huawei provided annual health checks to all full-time employees and performed 3, 200 checks to employees exposed to occupational health risks.
- Huawei Symantec - Joint venture between Huawei and Symantec
- High Speed Packet Access and HSPA+
- Huawei E5
- Huawei SingleRAN
- Shortest Path Bridging
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