Published on October 9th, 2006 | by Babar Bhatti90
Huawei’s Success in Pakistan and Beyond
Huawei is a Chinese telecommunication (wireless, networking) equipment maker with presence in 41 countries. Huawei defines itself as the leader in next generation telecommunication networks. Recently Huawei has signed two mega deals worth over a billion US$ with Pakistani telecommunication companies Worldcall and Ufone. The Ufone deal is worth US$ 550 Million and involves GSM expansion. The WorldCALL deal is estimated to be US$ 720 Million and its for setting up Wireless Local Loop service in South Pakistan.
In this post I’ll provide some background on Huawei and its standing in the world. Next posts will discuss the impact of the new deals on Pakistan’s economy and telecommunication sector.
The tremendous growth of Huawei in the last few years is impressive, given that it competes with established international giants such as Alcatel, Cisco and Lucent. As experts have noticed Huawei’s advantage goes beyond lower prices. Huawei is positioning itself as an innovator and leader of cutting edge technology products. See this Business Week article about Huawei’s R&D focus.
An important feature of the Chinese policy is the empahsis on developing its own technical standards. For instance Chinese are pushing for IPV6 in an effort to catch up with the US. Another example is the TDS-CDMA standard which was developed in China.
This company is respected, feared and criticized in the western world. See this MSNBC article on why some people think that Chinese government is too close behind Huawei’s success and the related security concerns raised. A few decades ago Japan’s trade ministry was also very active in promoting their electronics and auto industry. Now the focus is on China. I share a few lines from the article:
The combination of a strong work ethic and modern business practices is helping Huawei to alter customer perceptions of China Inc. in overseas markets. When Huawei salesmen first approached British data-services company Fibernet three years ago, the firm had been using merchandise built by Cisco, Ciena and Marconi, according to Fibernet marketing director Nigel Pitcher. When Pitcher visited Huawei headquarters, he expected “to be underwhelmed by a Third World sweatshop operation.” Instead, he says, he was “bowled over” by “the most modern manufacturing facility that I have ever seen.”
Huawei is certainly moving up on the technology and leadership chain. I think it has a bright future ahead.