Optical/IP Networks

Huawei H1 Sales Hit $4.1B

Huawei Technologies Co. Ltd. is growing even faster than expected, according to a trading update issued today. And the company's latest numbers, and especially its international success, will act as yet another reminder to the traditional major vendors that they're facing intense competition from the Chinese vendor.

Huawei says it was awarded contracts worth 33 billion Renminbi ($4.1 billion) in the first six months of this year, an increase of 85 percent over the same period in 2004, when it notched up deals worth $2.2 billion (see Huawei Eyes Super Sales Growth). That means Huawei is already more than half way towards its full-year target of $8 billion worth of contract sales (see Telecom's China Syndrome). And to put it into further perspective, the first half total of $4.1 billion is 73 percent of the vendor's sales for the whole of 2004 (see Huawei's Global Sales Hit $5.58B).

In addition, 62 percent of the total, RMB20.5 billion ($2.5 billion), came from deals outside its domestic market. That's higher than the firm's total international sales for 2004 of $2.3 billion.

Spokesman Richard Lee says this is the first time international sales have overtaken domestic sales.

Lee also confirmed that the international sales figures do not include any contracts from BT Group plc (NYSE: BT; London: BTA), which earlier this year named Huawei as one of its strategic vendor partners in its 21CN project (see Huawei Picked for BT's 21CN).

In fact, Western Europe accounts for only a small percentage of Huawei's international sales currently, though it regards the region as a key growth area. Just last month Huawei stated it was aiming to triple the value of its signed deals in Western Europe this year, with a target of $600 million for the whole of 2005 (see Huawei Plans to Triple Euro Business).

That target, and the sales figures released today, reflect the value of purchase orders received, and not audited revenues. For example, while Huawei's total sales in 2004 were $5.58 billion, actual revenues were $3.83 billion.

— Ray Le Maistre, International News Editor, Light Reading

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