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Huawei Gains Ground in HR Survey

Light Reading
News Analysis
Light Reading
2/23/2005
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Incumbent telecom equipment vendors should keep an eye out for Chinese manufacturer Huawei Technologies Co. Ltd., which is gaining ground quickly as a market leader, according to Heavy Reading's 2005 Wireline Telecom Equipment Market Perception Study, which was released today (see HR: Cisco Still Dominates).

Huawei's name recognition astonishingly grew by more than 50 percent in the year-plus since the autumn 2003 survey, mainly attributed to its growing visibility in the European market. But North American suppliers shouldn't rest on their laurels, Heavy Reading warns.

"On average, less than 10 percent of U.S. respondents named Huawei as a supplier in its 12 equipment categories," the report notes. "But it's clear that Huawei is well on its way to expanding outside its home market of China and must now be considered in the same category as more established incumbent vendors in the global marketplace."

Huawei cracked the top ten in the overall rankings: Its #8 position was a ten-spot jump from its #18 ranking in the fall 2003 survey – the biggest year-over-year improvement in buyer perception of any company in the industry. The survey – which drew responses from 160 service provider employees, representing more than 100 different operators worldwide – found that, while the Chinese manufacturer is best known for its low-priced products, it is building a solid reputation for service and support, as well. The company still could use some work polishing its image in product performance and reliability, two areas the survey showed need improvement.

Huawei's rapid rise in Europe shows that service providers are willing to break from existing suppliers for strategic equipment purchases, a fact that has to concern Huawei competitors. More than 33 percent of respondents ranked Huawei as the top vendor based on price, a significant lead over #2 Juniper Networks Inc. (Nasdaq: JNPR), which nabbed 25.4 percent of the vote.

But Huawei is also making strides in convincing customers that it offers more than cheap equipment. It cracked the top ten in service and support leadership, and it finished 11th overall in both name recognition and product performance. "Among European respondents, Huawei achieved name recognition ratings of 50 percent or more in six different product categories – edge routers, metro DWDM equipment, CWDM gear, long-haul DWDM equipment, DSLAMs/3G DLCs, and optical switches," the report notes.

Its quality rankings are also on the upswing, as evidenced by its leadership scores in the SDH MSPP sector, where it finished eighth in the product performance category, ahead of incumbent rivals NEC Corp. (Nasdaq: NIPNY; Tokyo: 6701), Sycamore Networks Inc. (Nasdaq: SCMR), and Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA).

"Huawei's most remarkable score came in the service and support category, where it received a rating of 16.7 percent, fourth-best in this group," the authors write. "By contrast, its service and support leadership rating in the fall 2003 survey stood at less than 1 percent."

— Chris Somerville, Senior Editor, Next-Generation Services




The Heavy Reading report, 2005 Wireline Telecom Equipment Market Perception Study, is available here.

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