Huawei breaks into US and European markets — MobileMonday Global: Industry News

^{WCDMA and cdma2000 1X network deals} Huawei breaks into US and European markets

9 Jan 2005 at 19:04 GMT Timo Poropudas

Huawei and its North American subsidiary FutureWei on December 8, 2004 announced that US mobile operator NTCH Inc has commercially launched Huawei’s next-generation CDMA 1X system in California and Arizona.

The launch represents Huawei’s first commercial deployment in the United States, following successful CDMA deployments in nearly 40 countries around the world.

On the same date Huawei also signed dealt to build a nationwide network for Dutch operator Telfort BV.

The deal with Telfort BV is the first of its kind won by a Chinese firm in Europe, the birthplace of 3G telephony and a marketplace dominated by global giants such as Ericsson, Nokia, Siemens, Alcatel and Nortel Networks.

And Huawei beat foreign giants including Ericsson to win the deal.

Before that Huawei won four 3G WCDMA deals, but all were in developing countries and regions.

On level with Ericsson and Nokia

“The shift to developed markets is a result of Huawei’s success in developing markets. Carriers everywhere are familiar with Huawei and they are less reluctant to buy Chinese-branded products,” said Robert Clark, a principal at Hong Kong-based Protocol Research.

The Dutch deal is expected to serve as a foothold for Huawei in the European market, which could give an even bigger boost to its overseas sales.

“The European market is listed as the most significant market in the internationalization strategy of Huawei,” said Deng Tao, president of Huawei’s Europe branch.

Huawei’s total annual revenues in 2004 are expected to be more than USD 5 billion. The firm said its overseas sales in 2004 exceeded USD 2 billion, almost double that in 2003.

Lea Cai, an analyst with Norson Telecom Consulting, forecast Huawei’s overseas sales will grow at an average annual rate of 30 per cent from 2001 to 2008.

“Basically Huawei is at the same starting point as its peers like Ericsson and Nokia in terms of their strength in 3G technology.”

Unlike most other Chinese firms, privately-held Huawei is not tight-fisted about research and development (R&D) expenditure.

It spends no less than 10 per cent of its annual revenue on R&D. Its annul sales revenue in 2003 stood at 31.7 billion yuan (USD 3.82 billion).