Companies

Huawei set to boost enterprise business

By Zhou Yan and Shen Jingting (China Daily)
Updated: 2011-04-29 10:10

KUALA LUMPUR - Huawei Technologies Co Ltd, China's biggest telecommunication equipment maker by sales, is set to boost its enterprise and terminal businesses in Malaysia this year, in addition to selling mobile networking equipment in the market.

Since entering Malaysia in April 2001, Huawei has become the biggest Chinese investor in the country, according to Malaysian investment authorities.

The company made a major breakthrough between 2007 and 2008, as its sales orders more than tripled to $180 million in 2008 from $70 million a year earlier.

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Dai Jingyue, managing director of Huawei Technologies (Malaysia) Sdn Bhd, said growth is expected to be about 20 percent this year, while net profit will see an even bigger rise, without revealing specific financial figures.

The company signed a Memorandum of Understanding on Thursday with Malaysia's Ministry of Science and Technology and Innovation, to help the country train 10,000 telecom professionals in the next five years.

"Malaysia will become one of the few global human resource centers for Huawei," Dai told China Daily. Huawei has 645 employees in Malaysia, among which fewer than 10 percent are Chinese. "Localization will help us to grow rapidly overseas, Dai said.

In the next two to three years, business with Malaysian telecom carriers will be the biggest revenue source for Huawei, Dai said. The company partially won a 10-year, $3 billion contract from Telecom Malaysia, to provide equipment and services for Internet Protocol Television and high-speed broadband.

However, the enterprise business is expected to see "big growth" as demand from companies to set up computer and communication networks is set to increase, according to Dai.

Huawei has increasingly looked to expand beyond its traditional phone network market because of its limited growth prospects, Bloomberg quoted Marketing Chief of Huawei, Richard Yu as saying.

In the second half of last year, Huawei categorized its core business into four areas - services to telecom carriers, enterprise business, personal consumer business and others.

Different fields bring different rivals for Huawei.

In addition to competition from traditional telecom equipment makers, Huawei also need to compete with Cisco Systems Inc in the enterprise business sector, Samsung Electronics Co Ltd and Apple Inc in the terminal device sector.

Huawei's revenue from its global enterprise business reached $2 billion last year and is expected to double this year, Lu Jun, China market vice-president of Huawei Technologies Co, said.

"Huawei is increasingly focusing on enterprise business. The number of global employees who specifically work for the enterprise business sector will surpass 10,000 this year," Lu told China Daily in a March interview.

Its product solutions in enterprise business include cloud computing, corporate communications and data center services. That directly poses a challenge to Cisco, which Huawei's Founder Ren Zhengfei said Huawei needs to "catch up within not too long a period".

Huawei shipped more than 120 million terminals globally in 2010, with revenue of about $4.5 billion. The company aims to gain device sales of $6 billion this year, up 33 percent from 2010, said Xu Xinquan, chief marketing officer of Huawei's terminal branch.

Overseas sales contributed about 65 percent to its total revenue last year, up from 60 percent in 2009, according to the company's annual financial report. The revenue for 2010 was 185.2 billion yuan ($28.5 billion), up 24.2 percent from a year earlier.