Huawei Technologies, the fast-growing Chinese telecommunications equipment maker, has pledged to step up its European sales efforts, in a move that will increase pressure on troubled western rivals.
Zhou Ming Cheng, Huawei’s European marketing director, told the Financial Times that the company had achieved sales of $2bn in Europe in 2007, up from $770m in 2006.
Mr Zhou said Huawei was aiming to boost European sales further this year, implying that it was seeking to increase its market share at the expense of its established rivals – Alcatel-Lucent, Ericsson and Nokia Siemens Networks.
Huawei’s aggressive overseas sales drive is putting pressure on Alcatel-Lucent and Nokia Siemens, which reported losses last year, and Ericsson, which saw net income fall. “I do believe that in the coming few years we are still growing very fast here,” said Mr Zhou. “The European market is one of the biggest in the world – very strategic to the company – so we put more investment in and we believe we will have a better and better position here.”
He claimed the 2006 merger between Alcatel and Lucent and the joint venture between Nokia and Siemens had given Huawei new sales opportunities because fixed-line phone and mobile operators did not want to be dependent on a restricted range of equipment suppliers. During the past two years, Huawei has been winning wireless infrastructure contracts with leading European mobile operators by edging out Alcatel-Lucent, Ericsson and Nokia Siemens.
Vincent Rech, an analyst at Société Générale, highlighted contracts secured by Huawei in 2007 with Vodafone in Greece, Romania and Spain; France Telecom in Belgium and France; and Telefónica in Germany. The contracts underline how Huawei is moving beyond China and other emerging markets to target sales in Europe and the US.
But while it is enjoying growing success in Europe, Huawei has made limited progress in the US. Mr Zhou said sales of $100m were achieved in the US in 2007.
The 2007 annual report of Huawei, which is not a public company, said it generated revenue of $12.6bn and net income of $673.5m. Mr Zhou played down suggestions by rivals that it was aggressive in its pricing of contracts so as to win orders.
He described Huawei as a private company and denied it received financial support from the Chinese government.