Mobile phone giant Huawei eyes huge opportunity for expansion in Africa

Revenue from the continent could rise by as much as 30 per cent in the next three years

PUBLISHED : Wednesday, 14 November, 2012, 12:00am
UPDATED : Wednesday, 14 November, 2012, 2:58am


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Huawei Technologies, China's largest phone-equipment maker, said revenue in southern and eastern Africa may climb as much as 30 per cent in the next three years as growth on the continent outpaces most regions.

The company plans to capitalise on low mobile-broadband penetration rates and increasing demand for smartphones in Africa, Li Dafeng, president for eastern and southern Africa, said in the capital Nairobi.

Huawei, based in Shenzhen, will also focus on developing its enterprise business that supplies equipment to governments and companies, he said.

Africa has less than five mobile-broadband subscriptions per 100 inhabitants, compared with more than 10 per cent in the rest of the world, according to the International Telecommunications Union, a Geneva-based industry group. Over the next five years, the continent is expected to be the fastest growing region in terms of mobile-phone connections, according to AT Kearney, the Chicago-based consultancy.

"There is still much room to grow, so we can see that in the next three years network availability will be improved greatly," said Radoslaw Kedzia, Huawei's chief technology officer for the east and southern Africa region. "This is why we can grow 20 per cent to 30 per cent."

Economic growth in sub-Saharan Africa is expected to accelerate to 5.7 per cent next year from 5 per cent this year, outpacing every other region except developing Asia, the International Monetary Fund said.

Huawei's southern and eastern African business comprises 25 countries including South Africa, Angola and Kenya. The company posted revenue of US$3.42 billion in 2011, up 15 per cent from US$2.98 billion in 2010 for the entire African region, Li said. Total sales account for 13 per cent of global sales, the company said.

"If you look at the penetration of mobile broadband, there is a lot of potential," Li said. "In my region, the penetration of smartphones is 10 per cent. In China, mobile-broadband penetration is 30 per cent, in Europe it is more than 50 per cent and 16 per cent in Kenya."

South Africa contributes 30 per cent of the company's African revenue. Huawei plans to grow market share as the country seeks to achieve 100 per cent broadband penetration by 2020, Li said.