Huawei coy on outlook as sales soar

PUBLISHED : Wednesday, 27 July, 2005, 12:00am
UPDATED : Wednesday, 27 July, 2005, 12:00am

Aggressive overseas expansion pays off as telecoms giant looks to build partnerships with foreign market leaders

Huawei Technologies, China's largest telecommunications equipment manufacturer, yesterday declined to upgrade its sales forecasts for the remainder of the year despite reporting stellar growth for the first six months.

Huawei reported 85 per cent year on year sales growth to 33 billion yuan in the period, more than half its projected full-year sales of US$7 billion to US$8 billion.

Overseas sales accounted for 61 per cent of total sales - US$2.47 billion - exceeding US$2.28 billion for the whole of last year.

'The numbers simply make us more confident of meeting those targets in the second half of the year,' Huawei spokesman Fu Jun said, adding that the competitive market in which the company operates remained challenging.

Huawei has been expanding aggressively into overseas markets, winning contracts in emerging markets ranging from Algeria to Turkmenistan.

But the company has also enjoyed more success in developed markets recently, and is included on a shortlist of eight vendors vying for contracts for BT's 21st century internet-protocol network project.

The firm expects an announcement from BT 'sometime in the third quarter'. Other shortlisted candidates include Fujitsu, Alcatel, Cisco, Siemens, Lucent, Ericsson and Ciena.

Mr Fu expects further success in the second half of the year.

'We will continue efforts to secure overseas contracts, not only in developing markets, but also from tier-one carriers who are recognising that Huawei is a reliable supplier and potential partner for future growth,' he said. 'We believe we will see more deals in developed markets in coming months.'

Mr Fu declined to comment on when Hong Kong-listed Sunday Communications would begin sales of 3G handsets. Huawei, which holds a 9.91 per cent stake in the mobile operator, is the equipment supplier for the roll-out of its Hong Kong 3G network.

'I should leave that question to Sunday,' Mr Fu said, adding that the firm's 3G handsets are already sold by Singapore-based SingTel and in some European markets.

There was no update from the company on whether it planned to tender its shares in Sunday Communications to PCCW.

The fixed-line operator has already bought 60 per cent of Sunday for $1.16 billion and is offering 65 cents a share for the remaining 40 per cent.

Mr Fu also said Huawei had 'no current plans' to list on the Hong Kong stock exchange.

'Even the company executives are not discussing that,' he said.