Huawei lobbies for rivals, hires ex-Nokia executive
Huawei's latest defense of its European rivals and hiring of an Australian to top management are part of its ongoing drive to appear more international
The latest moves from embattled telecoms equipment maker Huawei Technologies are showing it will continue its aggressive public relations campaign to convince the world it is a serious company and not just a spying arm of Beijing. One of those moves has Huawei actually lobbying on behalf of its major European rivals as everyone gets set to bid for billions of dollars in contracts to help China build its 4G mobile networks. The other comes in a new executive appointment that has Huawei hiring a major former top executive from Nokia (Helsinki: NOK1V), as part of the company's drive to make its management team look more global.
I have to commend Huawei for its determination to move forward despite the many setbacks it has faced in the west over the last year. In the US, the company has been banned from selling its core networking equipment due to concerns that such equipment could be used for spying by Beijing. In Europe, Huawei and crosstown rival ZTE (0763.HK; Shenzhen: 000063) face punitive tariffs amid EU accusations that they receive unfair support form Beijing.
The China-EU tensions have become particular cause for concern for European telecoms equipment makers like Ericsson (Stockholm: ERICb), Alcatel-Lucent (Paris: ALUA) and Nokia Siemens Networks. Those companies fear that any anti-dumping tariffs by the EU could result in retaliatory action by Beijing, just as China's three major telcos get set to spend billions of dollars to build 4G mobile networks within the next year.
Beijing has so far been mum about its intent in that dispute, even as the nation's largest telco China Mobile (0941.HK; NYSE: CHL) recently put out a massive tender for 4G contracts. Now Huawei is stepping up and saying it hopes European equipment suppliers will become important participants in the building of China's 4G networks.
Media reports cite a top Huawei executive, speaking at an industry event, as saying that European equipment makers have always been big innovators and a major force that helped to shape Chinese companies like Huawei and ZTE. He also adds that participation of the European firms in the building of China's 4G networks will help to globalise TD-LTE, a 4G standard developed in China.
From my perspective, this kind of talk looks sincere on one level, since TD-LTE would certainly have a much more difficult time becoming a global standard without the support of the European equipment makers. Still, I'm cynical enough to believe that Huawei is also trying to portray itself as the "good guy", coming to the defense of its European rivals even as Huawei itself faces anti-dumping tariffs in the lucrative EU market.
Following that cynical assessment, let's take a look at the other major news bit that has Huawei hiring former Nokia senior vice president Colin Giles to become executive vice president for Huawei's consumer business group. Giles, an Australian, was in many ways responsible for Nokia's rise in the 2000s to become China's dominant mobile phone brand, offering a wide range of quality mobile phones at many different prices.
Of course everyone knows what later happened to Nokia not only in China but also globally, as the company embarked on a rapid slide that has left it struggling for survival. Giles was a longtime China-based executive who left Nokia in June last year, and now it appears he could remain in China in his new position at Huawei.
I do think Giles can contribute to Huawei's aggressive new push into smartphones, drawing on his success at Nokia. But that said, I also do find it a bit unusual that Huawei would choose a foreigner with so much China background, since the company already has plenty of local talent that are very familiar with the China market. Either way, this move represents not only the hiring of a talented individual, but also a savvy PR ploy to show the world that Huawei is a major international player and not just a Chinese company.
Bottom line: Huawei's latest defense of its European rivals and hiring of an Australian to top management are part of its ongoing drive to appear more international.
To read more commentaries from Doug Young, visit youngchinabiz.com