Huawei's US Aspirations on Hold
Huawei Technologies Co. Ltd. appears to have put on hold plans for a private placement of shares in the U.S., judging by remarks that the company's chairwoman (or "chairlady" as Huawei puts it), Yafang Sun, made to Light Reading at its bash in London's Dorchester Hotel yesterday (see Huawei Gets BT's Blessing).
Yafang told Light Reading that there's no timetable for the private placement of shares, which is thought to be linked to Huawei's quest for a second U.S. partner to help the company establish a bigger presence among North American telecom operators (see Huawei on the Hunt).
Yafang also said there is no timetable for Huawei's planned IPO in the U.S. -- a carrot that the company occasionally dangles in front of its staff, who have a stock option scheme (see ...and East Looks West).
So far, Huawei's efforts to make a big name for itself in the U.S. haven't come to much. Huawei-3Com Co. Ltd., its joint venture with 3Com Corp. (Nasdaq: COMS) targeting the enterprise market, has got off to a slow start (see 3Com Feeling Cisco's Heat). And its U.S. subsidiary, Futurewei, has also had a bumpy ride since it was launched in 2002 (see Headcount: Outlawing Offshoring?).
In the past, Huawei has told Light Reading that its international expansion strategy is in three stages: developing countries, Western Europe, and North America. The idea is that success in one market leads to success in the next, because carriers often have interests that span more than one of these markets.
Remarks from BT Group plc (NYSE: BTY; London: BTA) -- praising Huawei for being so innovative and responsive -- suggest that stage two, gaining acceptance by European carriers, is going well. "We believe [Huawei] is moving up to be a world -class player in the market," Brian Levy, BT's technology officer, said yesterday.
ZTE, by the way, is a public company listed on the Shenzhen stock exchange, unlike Huawei, which is privately owned (by its staff and founders, with founder Ren Zhengfei owning a 3 percent stake). ZTE also had aspirations of staging an "international" IPO, on the Hong Kong stock exchange, according to a press release it issued in August 2002 (see ZTE Plans IPO). The plan was scrapped in April 2003 "because of the worsening market conditions," says a ZTE press officer, Rena Qin. "ZTE has never stopped seeking international financing channels for its expanding overseas business," she writes in an email. But resurrecting the plan for an IPO hasn't been discussed.
— Peter Heywood, Founding Editor, Light Reading