Huawei to launch cloud computing service in China, invest in 5G technology

PUBLISHED : Tuesday, 21 April, 2015, 3:11pm
UPDATED : Tuesday, 21 April, 2015, 9:10pm

Huawei, China’s biggest telecoms network equipment maker, will invest US$350 million over the next three years in consulting and system integration, methodologies and tools for network and data centre transformation, as part of a strategy to build its presence in connectivity as countries transform into digital economies.

The company will also spend US$600 million on research into 5G technology, and will conduct field tests this year and next with a view to introducing commercial 5G networks by 2020, chief marketing officer Yang Chaobin, told the company’s annual global analyst summit.

Huawei would join a number of companies looking into 5G, which promises greater speeds that could help smart cities and the “internet of things”, but which remains a work-in-progress currently with no unified standards as yet.    

Fan Chan, vice president of Huawei’s accounting department, said he expects the company’s annual revenue to double to $70 billion by 2018, with a year-on-year growth of 10 per cent or higher in the coming years. It will be looking to attract top talent from around the world top add to its current 170,000 employees globally, he added.

Huawei has run into difficulties in its plans for global expansion in the past because of concerns in some countries, particularly the US, over whether the company has links to the Chinese government and could be a security risk. However it has strong businesses in emerging markets like Latin America.

Huawei will launch its public cloud computing services in the mainland market in July, rotating chief executive Eric Xu said at the summit.

He did not say which Chinese telecom carrier it would work with on the service, only that the strategy would not create competitive conflicts with the carriers, who are also customers of its networking equipment.

The public cloud computing market in China has maintained growth rates of over 40 per cent, according to a report by tech research firm IDC, and further strong growth is expected.

Huawei also released its 2015 Global Connectivity Index (GCI) on Tuesday. The index ranks 50 countries across the world in terms of connectivity, information and communications technology (ICT) usage and digital transformation.

The United States ranked highest among the surveyed countries, with Sweden, Singapore, Switzerland and the United Kingdom making up the top five. China ranked 23rd.

According to the company, the index provides an indicator of which countries are best placed for development and growth as they transform into digital economies.

The index shows countries with higher scores are also those with higher per capita GDP. According to the Huawei study, a country's GDP will increase 1 per cent after a 20 per cent growth in ICT investment.

Huawei expects a total of 100 billion connections, both human and machine, by 2025, a figure that includes 8 billion smartphones, with 45 per cent of those connections from smart and wearable devices.