Telecoms giant Huawei looks to boost US investments

PUBLISHED : Tuesday, 19 April, 2011, 12:00am
UPDATED : Tuesday, 19 April, 2011, 12:00am
 

Huawei Technologies will reorganise its business units and boost investment in the United States after posting robust gains last year on strong demand from international markets.

The mainland's biggest telecommunications equipment manufacturer yesterday announced a 30 per cent increase in net profit last year to 23.76 billion yuan (HK$28.24 billion), from 18.27 billion yuan in 2009, on what it described as 'rapid growth in North America and the Commonwealth of Independent States'.

The Shenzhen-based company said there was also 'good momentum' in the Asia-Pacific, especially in Japan, Australia and major Southeast Asian markets and a steady rise in business across Africa.

Total revenue for the privately held manufacturer rose 24.2 per cent to 185.18 billion yuan.

Although growth on the mainland slowed last year due to reduced infrastructure spending by the three major telecommunications network operators, Huawei said it maintained 'market-leading position' as domestic sales increased 9.7 per cent year on year to 64.77 billion yuan.

'We remained the industry leader in mobile broadband, optical transmission, optical access, and core networks, while expanding our co-operation with the world's leading telecoms operators in the software domain,' Huawei chief executive Ren Zhengfei said.

Total sales for its telecommunications networks business grew 23 per cent to 122.92 billion yuan.

Its devices business, which includes smartphones, saw a 24.9 per cent gain to 30.75 billion yuan.

The global services business was up 28.6 per cent at 31.51 billion yuan.

Ren said Huawei would reorganise its operating structure this year into four groups - carrier network, enterprise business, device business, and other business - 'to deliver better products and faster services, and promote stable growth despite uncertainties in the external environment'.

Matt Walker, a top analyst at market research firm Ovum, said new attention to the enterprise business marked a way for Huawei to compensate for slower-than-expected expansion into key markets.

'Huawei has reached a plateau in the growth of its largest division, networks, as further growth there requires geographic expansion in North America and Japan,' he said.

Lingering security concerns have hurt Huawei's efforts to expand operations in the United States, the world's largest telecommunications market.

Huawei aims to step up investments in the US, while pursuing new corporate acquisitions and infrastructure projects in the lucrative market.

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