Light Reading

Can Huawei Change?

Ray Le Maistre
1/4/2013
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9:30 AM -- The new year message posted by Huawei Technologies Co. Ltd. acting CEO Guo Ping, in which he provides guidance for the company's financial performance in 2012, contains many of the assurances Huawei has broadcast during the past few years -- how it is going to be more open, accountable, responsible and so on. (See Huawei Memo Suggests Major 2012 Growth.)

Those assurances are more noteworthy than ever, given the company's experiences in the U.S., Australia and other markets during 2012. (See US vs Huawei/ZTE: The Verdict, Australia's (Safe) Bet Against Huawei and Huawei Denied German Bid.) Among a number of interesting passages, including one that notes how Huawei managers who "expand business blindly must be held accountable" (gulp!), this is the one that, I believe, will come under the greatest scrutiny during the coming year:

In 2013, we will further our efforts in legal and regulatory compliance across the world, become more open and transparent, and proactively contribute to the betterment of the global business environment. Huawei has business presence in 150 countries and regions worldwide. Apart from providing products and services, we are committed to integrating with local society. We will expand business operations, create jobs, and contribute to tax revenue. We will attract more talent from all over the world to create a better future for the company.

Great phrases for Huawei's representatives and supporters to repeat, but meaningless without tangible, identifiable actions, including a quantifiable clampdown on the antics and actions (copying others' marketing materials, taking pictures of rivals' show floor displays and so on) that have damaged the company's brand over the years.

Let's make one thing clear: To the editorial team here at Light Reading, Huawei is just one of many companies that influence the market in many ways and it gets the same treatment as any other. We don't have favorites and we don't champion or denigrate companies because of what they are or where they come from.

But as our reporting has shown over the years, Huawei staff have, time and time again, tarnished the company's reputation and handed ammunition to its detractors.

It's not alone, of course: Nearly every major company with thousands of employees has found itself having to defend the actions of staff over the years. But more than any other company, given its history and current situation, Huawei needs to prove it can be open, accountable and responsible. If it can achieve its stated goals then Light Reading will be at the front of the line to say so. If it transgresses, we'll be reporting that too.

CEO Guo Ping has set out Huawei's stall for the year and beyond, and the company should be applauded for sharing the mission statement. Now let's see if the company can live up to its own expectations.

— Ray Le Maistre, International Managing Editor, Light Reading

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Ray Le Maistre
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Ray Le Maistre,
User Rank: Light Sabre
1/7/2013 | 10:20:35 AM
re: Can Huawei Change?
Hi RonJohn12
We don't look at companies as being 'OK' or not -- we report on what is happening in the industry with the needs of our readers in mind.
Huawei has long used Light Reading for its marketing, whether as an advertiser or a sponsor of events. This has no impact on our editorial content and the same applies to any other company we write about.
It's often hard to convince people of this because so much business-to-business content these days is 'sponsored' -- we do our very best to be objective in all instances.
Ray Le Maistre
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Ray Le Maistre,
User Rank: Light Sabre
1/4/2013 | 7:38:26 PM
re: Can Huawei Change?
The bad hair jibe is just fair comment...
brookseven
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brookseven,
User Rank: Light Sabre
1/4/2013 | 6:35:29 PM
re: Can Huawei Change?
cuc117,

I think you misunderstand my comments. -áIt does not matter very much how things work in China if you want your perception to be globally different. -áHuawei-ácan either:

1 - Keep doing what you are doing and be viewed as an arm of the Chinese Government or;

2 - Do something different

Saying nice things without significant changes will do nothing. -áHuawei is not obligated to do anything but there it is.

seven
cuc117
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cuc117,
User Rank: Light Beer
1/4/2013 | 6:07:08 PM
re: Can Huawei Change?
I am chinese. You don't-áunderstand china society and government. A company having so much sales revenue in china cannot distant itself from government too much. But from my knoledge, Huawei has no none-business relation with PLA.
RonJohn12
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RonJohn12,
User Rank: Light Beer
1/4/2013 | 4:05:51 PM
re: Can Huawei Change?
Huawei has far more than a branding-áand image problem. Denial of reality-átinged with a hefty dose of-áarrogance seems to be a core issue for them.-á The company-áappears to believe that a new press release of promises [yet again] from someone [who is not really in charge] can compensate for-átheir longstanding lack of-ácorporate transparency and-áa well founded-áreputation as a company that-ástraddles the thin red line between ethical and unethical business practices.

I see-áon the sidebar tha Huawei-áhas now sponsored a Light Reading event. Does this mean they are okay now from a LR journalistic perspective?-á
pjbclarke
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pjbclarke,
User Rank: Lightning
1/4/2013 | 4:00:24 PM
re: Can Huawei Change?
Ray, glad you raised the accounting issue since you and i exchanged mail on this last year. I dont believe they ever produced a revised set of prior year financials did they ? If not it will be interestto look at the selected financial history section-á this spring
brookseven
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brookseven,
User Rank: Light Sabre
1/4/2013 | 3:53:26 PM
re: Can Huawei Change?
Ray mean! -áYou are bad! -áAnd you have bad hair. -áNow that the personal attacks are done...:)

I think the best thing Huawei could do is become more corporately transparent. -áThe best way to do that would be to IPO on a western exchange. -áIf not in the US then in Europe. -áGiven the history, there is going to be little trust until Huawei distances itself from the Chinese government. -áThis is true even if Huawei does not think that it is close to the government, it is certainly viewed as it is.

If it really wanted to go over the top Huawei could call for an end to export subsidies and complete floating of the Chinese currency. -á

seven
Ray Le Maistre
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Ray Le Maistre,
User Rank: Light Sabre
1/4/2013 | 2:58:40 PM
re: Can Huawei Change?
let's see if we can host a discussion about this topic without any personal attacks....

The acting CEO has set the bar high - and with Huawei becoming an even bigger global force and its name now much better known worldwide (often because of political decisions that don't do anything for its image), it will be under even greater scrutiny. The company's public relations and corporate governance operatives have their work cut out.

A good start would be to publish an annual report that compares like-for-like financials with a full explanation of how the numbers are accounted for, unlike last year when a new financial reporting method was introduced without any accompanying explanation... -- see

The Number's Up for Huawei
http://www.lightreading.com/mo...
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