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Huawei's Next Move in Europe

Michelle Donegan
News Analysis
Michelle Donegan
6/28/2011

CAMBRIDGE, U.K. -- Future of Wireless 2011 -– While Huawei Technologies Co. Ltd. has broken into many of Europe's largest operators and beaten incumbent suppliers to contract awards during the past few years, the Chinese vendor clearly wants more from the region. (See Huawei's Trojan Horse and Euronews: What Next for Huawei?.)

At the Future of Wireless industry gathering in Cambridge on Monday, Edward Zhou, Huawei's chief marketing officer for the Western European region, discussed the company's strategy for this neck of the woods.

There is room for Huawei to grow in Europe, based on the vendor's 2010 financial performance. According to Zhou, Huawei's total revenue for 2010 was US$28 billion, of which just US$2.7 billion came from Europe. "$2.7 billion is not a big number," said Zhou. (See Huawei Profits Climb 30% in 2010 .)

Also, relative to Huawei's total workforce, the Chinese vendor's presence in Europe in terms of employees is not dramatic. According to Zhou, Huawei has 110,000 employees worldwide and about half of them work in research and development. In Europe, Huawei has 5,300 employees, of which about 500 work in R&D. He also noted that 65 percent of its European workforce is made up of local employees.

But those European employee figures are likely to change. Zhou noted that the two most important factors for his company's success and long-term strategy are innovation and localization. To that end, Huawei's future expansion in Europe will be through hiring more people and partnering with more local companies, he noted.

That strategy is already in action, though. For example, the vendor is in the process of doubling its workforce in the UK, and just last week press reports linked Huawei to the acquisition of Greek vendor and systems integrator Intracom Telecom. (See Huawei Ups UK Spending Plan, Huawei to Hire 500 in UK, Huawei Opens UK Security Evaluation Center and Euronews: ST-Ericsson Cuts, Huawei Eyes a Buy.)

Huawei has six European R&D centers -- located in Stockholm, Gothenburg, Lund, Munich, Paris and Milan -- but the vendor's intention is to establish what it calls a "competency center" in the region, possibly for business consulting or professional services. The idea is to not just develop products and services only in China to sell internationally, but to create and innovate solutions in Europe using local skills and expertise to take to other parts of the world. Huawei could also expand its infrastructure manufacturing in the region, which it currently carries out in Hungary.

— Michelle Donegan, European Editor, Light Reading Mobile

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12/5/2012 | 5:00:54 PM
re: Huawei's Next Move in Europe


Some of the general moves here are not unfamiliar - Huawei is always saying it will get more 'local' yet the feedbcak from the industry is often that Huawei is still too tied to its HQ in China.


 


But I sense a general shift, almost as if Huawei is entering Phase III of its corporate development and that could spell bad news for its 'Western' rivals.

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