Huawei Tips Carrier Kit Sales to Rebound
After a rare dip in revenues last year, Huawei is tipping sales of carrier equipment and solutions to grow in "double digits" in 2019.
Ken Hu, the current acting chairman, said that he expects the unit to rebound despite US government efforts to persuade European and Asia-Pacific allies to exclude the company from their 5G networks.
Last year the unit -- Huawei's biggest -- sold 294 billion yuan ($43.8 billion) in operator solutions and services, down 1.3% from the previous year.
Hu told Huawei's annual analysts' summit in Shenzhen Tuesday that he anticipated "stronger growth compared with 2018 in terms of 5G deployment and 4G network investment."
He said that since mid-2018 operators increasingly take an investment-driven view of 5G, rather than a "hot topic-driven" approach.
"They can see a very clear business case in the [3GPP] Release 15 scenario," he said. "They will be able to offer services for personal and industrial applications and some very effective use cases."
5G networks would "further grow business for operators. We expect double digit growth for our carrier business."
The company has said total revenues improved approximately 30% in the first two months of the year.
This year it's also expecting a sales uptick from 4G network upgrades and from investment in backhaul and transmission capacity to prepare for the much bigger 5G traffic loads.
Hu said Huawei was still participating in 5G trials in Japan, amid reports of government restrictions on its activities, and believed "the government and operators will make their own decisions" on the company's role in commercial 5G.
He noted that while Australia had excluded Huawei from 5G, the vendor was still supplying equipment to the 4G market.
Analyst Phil Marshall, chief research officer at Tolaga Research, expressed caution about expecting quick early 5G rollouts.
He said radio spectrum would be one constraint. "Globally, there are lot of operators short of radio spectrum. If they don't have it, they are not going to deploy."
Deployment was also dependent on the 5G business case, which he says is primarily "eMMB [enhanced mobile broadband] -- doing 4G more efficiently.”
"I think there are some operators who want to deploy rapidly but they don't have the radio spectrum or the infrastructure."
He said the new business cases had to prove themselves. "Proof of concept isn't proof of a business case."
This was especially true in the industry verticals, which operators are eyeing as potentially huge new growth paths but which demand a good deal of preparation.
Each industry has its own unique ecosystem, says Marshall. And while operators have been working on 5G for five or so years, many industrial companies have only just started to look at it.
There will be additional expenditure on 5G preparation and 4G upgrades, Marshall said, "but it's not going to be a huge increment."
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— Robert Clark, contributing editor, special to Light Reading