BMI Huawei Technologies 2008

HUAWEI TECHNOLOGIES
- COMPANY REPORT -
PUBLISHED: 2008
Huawei Technologies Report 2008

Including 5-year financial analysis by BMI
Part of BMI's Industry Report & Forecasts Series

Published by: Business Monitor International Publication Date: October 2008
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CONTENTS
Company Summary..........................................................................................................................................4
Huawei Technologies Co Ltd................................................................................................................................................................................. 4
Corporate Structure .........................................................................................................................................5

FutureWei Technologies ........................................................................................................................................................................................ 5 Company Ownership................................................................................................................................................................................................... 6 Products...................................................................................................................................................................................................................... 6 Table: Huawei Technologies Product Summary ................................................................................................................................................. 6 Table: Huawei Technologies Product Summary (continued) ............................................................................................................................. 7 Table: Huawei Technologies Product Summary (continued) ............................................................................................................................. 8 Alliances And Agreements .......................................................................................................................................................................................... 8 Huawei Technologies Alliances And Agreements, 2007-2008 ............................................................................................................................ 9 Research & Development.......................................................................................................................................................................................... 12
Financial Indicators........................................................................................................................................13
Table: Huawei Technologies Audited Five-Year Financial Summary, 2003-2007 (US$mn)............................................................................. 13 Table: Huawei Technologies Annual Contract Sales By Geographic Area, 2003-2007 (US$bn) ..................................................................... 14
Corporate Strategy.........................................................................................................................................15 Company Timeline .........................................................................................................................................17

Huawei Technologies Corporate Timeline, 1990-2008........................................................................................................................................ 17
Company Activity ...........................................................................................................................................20

Recent Major Developments ..................................................................................................................................................................................... 20 Supply Contracts, 2007-2008.................................................................................................................................................................................... 23 Huawei Technologies Selected Supply Contracts, September 2007-2008 ............................................................................................................ 23
SWOT Analysis...............................................................................................................................................30
Huawei Technologies SWOT ............................................................................................................................................................................... 30
Business Monitor International Ltd
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Company Summary
Huawei Technologies Co Ltd
Summary
Huawei Technologies is a leading provider of next generation telecoms solutions, boasting to serve 35 of the world's top 50 operators. The companys products and solutions encompass wireless products (HSDPA/WCDMA/EDGE/ GPRS/GSM, CDMA2000 1xEV-DO/CDMA2000 1X, TD-SCDMA and WiMAX), core network products ( IMS, Mobile Softswitch, NGN ), network products (FTTx, xDSL, Optical, Routers, LAN Switch), applications and software (IN, mobile data service, BOSS), as well as terminals (UMTS/GSM/CDMA). Huawei was established in 1988 and is a privately held company.
Address ! Huawei Technologies Co Ltd Bantian Longgang District Shenzhen 518129 China ! Tel: +86 755 287 80808 ! Fax: +86 755 287 89422 ! Web: www.huawei.com
Key Executives* ! Ren Zhengfei CEO and Founder ! Sun Yafang Chairwoman of the Board ! Xu Zhijun Executive Vice President, Chief Marketing Officer ! Ken Hu Senior Vice President, Chief Sales and Services Officer ! Alex Deng Senior Vice President ! Wang Jin Vice President, Head of Huawei European Marketing * As of August 2007 (latest details available)
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Corporate Structure
Huawei Technologies' global operations system is continually being upgraded to support the long-term development of its global services.
During 2006, Huawei upgraded its regional organisational structure and moved its support centres closer to its customers in an effort to better meet their needs. The company has set up over 100 branch offices worldwide, established a Key Account Support Department and integrated service and delivery resources to ensure quality in these areas for its customers. Huawei also aims to keep improving upon its customerdriven R&D system to provide competitive solutions and services through continuous innovation.
Huawei has established more than 10 technical support centres, 31 overseas training centres and 128 warehouses. It has also built 103 representative offices in 90 countries and regions worldwide, which includes local sales and service institutions, R&D centres, training centres, technical support centres and production centres. Meanwhile, more than 10,000 professional service employees of Huawei, together with over 1,500 strategic partners, provide customers with timely project delivery and specialised service support.
FutureWei Technologies
Huawei created FutureWei Technologies as a wholly owned subsidiary in June 2002, with the aim of it becoming a leading supplier of carrier class telecoms equipment and low to mid-range enterprise network equipment in North America. Huawei said that the establishment of FutureWei underscored the company's commitment to international business development and long-term investment in the North American market.
FutureWei is dedicated to the research and development, sales and marketing and customer services for its own-branded and Huawei-branded network equipment and solutions. In addition to its headquarters in Plano, Texas, FutureWei also operates two branches in San Jose, California, and Reston, Virginia, to provide sales and marketing and after-sales services for its partners and customers in North America.
FutureWei provides a wide range of network equipment and solutions, from metro networks, optical networks, optical input and turnkey corporate network solutions. The branded products include SONET, DWDM, broadband metro networking equipment, corporate networking equipment, videoconferencing equipment, routers, Ethernet switches and customised subsystems.
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Company Ownership
Huawei Technologies is a private venture that is owned by its Chinese employees under an Employee Stock Ownership Plan. The companys founder and CEO, Ren Zhengfei, owns less than 2% of Huawei.
Products
Table: Huawei Technologies Product Summary
Technology/Product UMTS Fourth Generation BTS Outdoor Macro Node B Indoor Macro Node B Distributed Base Station Indoor Coverage Distributed Node B Indoor Radio HUB Indoor Coverage Distributed Node B Indoor Pico RRU UMTS Femtocell Radio Network Controller
Technology/Product Mobile Core Networks GSM/WCDMA Core Network GSM / UMTS MSC Server Media Gateway GSM / UMTS HLR Service GPRS Support Node Gateway GPRS Support Node CDMA Core Network CDMA2000 MSC Server Media Gateway CDMA2000 HLR CDMA2000 PDSN Packet Access System
GSM Fourth Generation BTS Macro Indoor Base Station Base Station Controller Outdoor Base Station Outdoor Mini Base Station
CDMA2000 Mobile IP Home Agent CDMA2000 AAA Server Support Platform SG7000 Charging Gateway Synlock BITS
CDMA2000 The Compact Indoor Macro CDMA BTS3606C Super Indoor Macro CDMA BTS3606E Distributed Outdoor Macro CDMA BTS3606AE Huper BSC
Terminals Handsets (UMTS, CDMA, GSM/GPRS) Mobile Broadband (Data Cards, Modules) Convergence Terminals (Fixed Wireless, 3G Router and WiMAX CPE, Multi-Play Centre) Fixed Network CPE (xDSL Modem, Home Gateway) Video Products (Videoconferencing, Set-top Boxes)
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Table: Huawei Technologies Product Summary (continued)
Technology/Product Storage & Networks Security SoftCo Series IP PBX OceanStor S2000 Series Storage System OceanStor S3000 4Gb FC Storage System OceanStor S5000 Series Storage System OceanStor S5100 Storage System OceanStor S6800 4Gb FC Storage System OceanStor VTL3600 Series Virtual Tape Libraries Safe Box for Key Data OceanStor V1000 Storage System Video Surveillance Storage Solution Tecal Server Products
Technology/Product Next Generation Network MediaX3600 Enhanced Conference System SoftX3000-Softswitch Universal Media Gateway Smart HLR Media Resource Server RM9000 Resource Manager Integrated Access Media Gateway iManager N2000 OSS Session Border Controller
Access Optical Distribution Network (ODN)
IP Multi-media Subsystem Call Session Control Function (CSCF) Home Subscriber Server (HSS) Voice Call Continuity Application Server (VCC AS) Telephony Application Server (Telephony AS) Policy Decision Function (PDF) Network Attachment Subsystem (NACF/CLF) Media Resource Server (MRFC/MRFP)
DSLAM MSAN Network Management
Data Communication NE Routers AR Routers Multi-Service Control Gateway (MSCG) Metro Services Platform
Application And Software Digital Music Messaging & Application Information Service Digital Entertainment Convergent Billing Integrated Service
Ethernet Switches Network Management Resource Policy Control System
WiMAX WiMAX Base Station 3703 WiMAX Wireless Broadband Gateway WASN9770
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Table: Huawei Technologies Product Summary (continued)
Technology/Product Distribution & Auxiliary DF (Distribution Frame) RF (Radio Frequency)
Technology/Product Optical LH/Metro WDM NG-SDH NG-SONET Microwave Network Management Application Software
Source: Huawei Technologies
During the first half of 2008, Huawei boasted several achievements relating to product sales and market shares. In June 2008, industry consulting firm Broadbandtrends ranked Huawei first in the global DSL market with a market share of over 31%. By Q108, Huawei had shipped a total of 150mn lines of access equipment including 70mn DSLAM ports to over 96 countries and regions. In the optical access market, Huawei had built the worlds largest GPON FTTH network and provided optical access solutions to more than 40 operators in the world, including BT, KPN, Etisalat, China Telecom and China Netcom.
Huawei also reported that its UMTS and GSM transceiver (TRX) shipments recorded over 100% growth in H108 as compared to the same period in 2007. In the GSM space, Huawei delivered 800,000 TRXs, more than the total number of shipments for the whole of 2007 in H108. 400,000 TRXs were delivered in China and India alone. By August 2008, Huawei had secured 111 UMTS/HSPA commercial contracts and continues to lead the market with 25 new contracts in H108.
In 2007, Huawei increased its worldwide market share of mobile softswitches from 31.2% to 43.7%. The companys softswitches have been installed in over 90 countries by more than 140 operators, including Vodafone, Orange, Telefnica, KPN, China Mobile, China Unicom, Reliance, Tata and Etisalat.
Alliances And Agreements

Huawei has formed numerous partnerships with leading companies and co-operates with them on the foundation of its self-developed technologies. The company works closely with leading multinationals such as ADI, Agere, Altera, Hewlett Packard, IBM, Intel, Microsoft, Motorola, Oracle, Sun
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Microsystems, Texas Instruments and Xilinx to improve the time to market of its products and to incorporate the latest technologies and best management practices into the company.
Huawei has also set up a joint venture with Nokia Siemens Networks, which focuses on the research, production, sales and services of TD-SCDMA technology in order to further advance its development. Jointly with Motorola, Huawei set up a UMTS research centre in Shanghai, which is engaged in providing global customers with more powerful UMTS/HSPA products and solutions.
Furthermore, Huawei has set up joint laboratories with a number of companies, including: Intel, Texas Instruments, Freescale Semiconductor, Qualcomm, Infineon, Agere Systems, Microsoft, IBM, Sun Microsystems and HP.
Huawei Technologies Alliances And Agreements, 2007-2008
Product 2007 RadiSys
Description
In February, RadiSys, a US-based provider of embedded solutions, announced that it was working with Huawei to deliver solutions to the global marketplace for IP Multimedia Subsystem (IMS) infrastructure and enhanced services. In recent years, IP media processing platforms and technology for Huawei's Media Resource Server (MRS) products had been based on technology developed by Convedia, a company acquired by RadiSys. The Huawei U-SYS Next Generation Network (NGN) solution and fixed and mobile convergent IMS solution incorporate MRS products based on Convedia Media Server technology and are now being marketed and sold into Huawei's global customer base. RadiSys and Huawei are committed to working together to develop multimedia solutions, including video services for deployments in fixed, mobile and cable/MSO networks. In February, Huawei and BroadSoft, a provider of VoIP application software, announced that BroadSoft's BroadWorks IP Multimedia Subsystem (IMS) application platform had been successfully integrated as part of the Huawei's IMS solutions for telecoms operators. Under an agreement with BroadSoft, Huawei will distribute the BroadWorks platform. In March, RADVISION, a provider of voice and video network infrastructure and developer tools for unified visual communications over IP, 3G and emerging next generation networks, announced that Huawei had selected the RADVISION SCOPIATM 3G Gateway, 3G Video Communication Solutions and Interactive Video Platform to enhance its 3G products and solution offerings. RADVISION said that the deal advanced the adoption and widespread deployment of new video-based interactive services in the 3G market. In May, Huawei entered into a strategic partnership with the Bahrain Telecommunications Company (BATELCO), according to the TradeArabia News Service. The aim of the agreement was to extend and improve the existing relationship between the two groups, while facilitating the best possible commercial terms, knowledge transfer and marketing processes. Under the terms of the agreement, BATELCO will provide Huawei with relevant information concerning future requirements and strategies. In exchange, Huawei will provide BATELCO with updates on its product development and future roadmap of services. The relationship agreement is due to expire on December 31 2009.
BroadSoft
RADVISION
BATELCO
Symantec
In May, US-based Symantec and Huawei announced plans to form a joint-venture company that would develop and distribute security and storage appliances to
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global telecoms carriers and enterprises. The new company would be headquartered in Chengdu, China, with Huawei owning 51% of the venture and Symantec owning 49%. Huawei would contribute its telecoms storage and security businesses, including its integrated supply chain and integrated product development management practices. Additionally, the new company would have access to Huawei's intellectual property (IP) licences, research and development (R&D) capabilities, and manufacturing expertise and engineering talent, which included more than 750 employees. The venture's services and support infrastructure would draw upon Huawei's model for customer service and technical support, including worldwide technical support and call centre operations. Symantec would contribute some of its enterprise storage and security software licences, working capital and its management expertise into the new company. Symantec would also contribute US$150mn towards the growth and expansion of the joint venture, which was expected to be finalised in late 2007, pending the receipt of regulatory and governmental approvals. Optibase In June, Huawei and Optibase announced an alliance to provide integrated TV over IP services. Huawei selected Optibases Media Gateway (MGW) platforms to provide MPEG-4/H.264 encoding and streaming as part of its IPTV offering. Optibases MGW streamers let service providers stream TV over broadband IP or ATM networks, such as xDSL and FTTx. The MGW product line offers highdensity, modular platforms that encode, transcode, transmit and recast broadcast quality HD and SD MPEG-4/H.264 and MPEG-2 video channels in real-time. In July, Venezuela's Telecommunications Minister Jesse Chacon said that a joint venture involving Telecom Venezuela and Huawei would produce as many as 2mn mobile phones in Venezuela from 2008. The phones would use the GSM standard, thereby allowing users to access services in different countries. No further details were given. In September, InfoVista announced a partnership with Huawei. A central component of the partnership is InfoVistas support for Huaweis IP core routers and edge switching solutions. According to InfoVista, by incorporating features of InfoVistas performance management software, VistaInsight for Networks, Huawei will significantly differentiate its product offerings and provide service providers unparalleled visibility into the performance of their networks. VistaInsight for Networks was verified to support Huaweis Quidway AR Series service routers and the Quidway NE Series core switching routers. The verification includes automatic probe creation and discovery on the AR Series with a comparative support for NQA probes on the NE40, 40E, 80, 80E and 5000E routers. This enables the collection and analysis of packet delay, jitter and loss parameters essential in providing carrier class Service Level Agreements (SLA) to customers. International Telecommunication In October, Huawei signed a memorandum of understanding (MoU) with the IT to Union (ITU) jointly promote ICT development in developing countries. Under the terms of the MoU, Huawei and the ITU will work together to improve connectivity in rural and remote areas in emerging markets, as well as to close gaps in broadband backbone networks. Both parties will also co-operate to improve interconnection between regions and develop local telecoms expertise by offering training programmes focusing on the maintenance of established networks. These initiatives would be implemented based on an analysis of existing and planned infrastructure. As a first step, the two parties would use Huaweis existing training centres in India and Nigeria to provide telecoms training for local talent. Huawei operates 22 training centres across the world, with 12 strategically located in developing countries, including India, Nigeria and Egypt. In line with this, Huawei also donated telecom equipment worth US$130,000 to
Telecom Venezuela
Infovista
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the Rwandan government, to provide broadband services in support of the Connect Africa Summit. Global Marine Systems In December, Huawei and Global Marine Systems announced that a new joint venture, Huawei Submarine Networks, would be launched in early 2008. Huawei Submarine is the culmination of a MoU signed by both parties in March 2007. Huawei Submarine will deliver end-to-end submarine network equipment, and related services, enabling highly advanced communications capabilities on a global scale. 2008 Vodafone In January, Huawei and Vodafone Spain signed an agreement to set up an Application Innovation Centre in Madrid for the Vodafone Group to innovate new products and services. In January, Huawei and Vodafone UK commercially launched a next generation USB device, the Vodafone Mobile Broadband USB Modem Stick, or E172, which boasts HSUPA technologies and enables uplinks speeds of up to 2Mpbs and download rates of 7.2Mbps. In February, Huawei and Qualcomm signed a technology transfer agreement for advanced Node B (base station) receiver design that could benefit all UMTS systems, Release 99 and onwards. The agreement covers new technology that can boost the data throughput performance of HSUPA networks by up to 60%. Technology transferred by Qualcomm under this agreement will enable Huawei to deploy highly advanced 3G networks in markets using any UMTS-based technology. The key feature of this technology is Uplink Interference Cancellation, a component of advanced receiver designs for Node B technology. Brightstar In February, Huawei appointed Brightstar as an agent to boost the sale of its terminal products in key regions around the world. The deal covers the sale of Huaweis wireless terminal products in all leading regions worldwide. Brightstar will collaborate closely with Huawei to explore key markets, deliver Huawei products to leading mobile operators and help Huawei to promote its products in the marketplace. In March, NextWave Wireless of the US and Huawei Technologies announced a strategic partnership agreement to jointly develop and market advanced WiMAX broadcast solutions for mobile operators worldwide. The collaboration will bring WiMAX solutions to market more rapidly and cost-effectively in order to address the needs of the growing market for mobile TV and broadcast services. Under the Agreement, Huawei will integrate NextWave's MXtv Macro-Diversity Multicast and Broadcast technology into its fourth generation base station platform and ASN-GW network platforms, which fully conform to the 802.16e (WiMAX) air interface standard. In addition, NextWave has integrated the technology into its low-power, Wave 2 compliant NW2000 WiMAX subscriber System-on-a-Chip (SoC). The partnership between the two companies drives the development of higher performance and more cost-effective WiMAX-based mobile broadcast solutions. Huawei's and NextWave's' solutions became commercially available at the end of Q208. DiBcom In June, DiBcom, a provider of mobile TV solutions, announced that its DIB9080H chipset, which includes a tuner and demodulator, was being used by Huawei for its new E510 HSPA card. The D510 is the first wireless datacard that adds a DVB-T-based mobile TV functionality, which can be used free on any notebook throughout Europe and in parts of Asia. On the wireless side, the E510 supports all wireless standards from GSM/GPRS/EDGE (9in 900/1800/1900MHz) to HSPA/UMTS (in receiver diversity at 2100/900MHz). The card is based on a 3.5G HSPA modem allowing very fast data transfer rates (7.2Mbps HSDPA and 2Mbps HSUPA) to combine
Vodafone
Qualcomm
NextWave Wireless
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the advantages of mobile communications and broadband services and to meet the requirements of high-speed internet access. It supports Windows XP/Vista through Plug-&-Play. Nokia and Nokia Siemens Networks In September, Nokia and Nokia Siemens networks announced a patent licence agreement with Huawei and its affiliates for standards essential patents. The agreement covers the worldwide use of all standards-essential patents of all parties, including GSM, WCDMA, CDMA2000, optical networking, datacom and WiMAX in mobile devices, infrastructure and services
Research & Development

Huawei continuously works towards improving its customer-driven research and development (R&D) system to provide competitive solutions and services through continuous innovation. As a result, Huawei invests a minimum of 10% of its annual revenue in R&D, with 10% of that investment used for preresearch to stay at the forefront of new technologies and breakthroughs. In addition, Huawei has invested heavily in the development of its ASIC chips. By June 2008, the company had developed over 100 types of ASIC chips including UMTS baseband and HSDPA chips, optical network chips, router chips and broadband access chips, greatly improving the system's capabilities and thus enabling the company to offer unique advantages at a lower cost.
As of June 2008, Huawei had over 87,000 employees, of whom 42% were dedicated to R&D. Huawei's global R&D centres are located in Bangalore in India, Silicon Valley and Dallas in the US, Stockholm in Sweden and Moscow in Russia, in addition to those in Beijing, Shanghai, Nanjing, Shenzhen, Hangzhou and Chengdu in China. Huawei set up its Shanghai UMTS research centre jointly with Motorola in July 2006. This collaboration was designed to bring an enhanced and extensive portfolio of UMTS and HSPA infrastructure equipment to customers worldwide.
By June 2008, Huawei had filed 30,569 patent applications. By the end of 2007, the company held 7% (152 patents) of the world's UMTS essential patents, ranking among the top five in the world.
Huawei also actively participates in over 83 international standardisation organisations including the ITU, 3GPP, 3GPP2, IETF, ETSI and OMA. In 2007, a total of 3,072 proposals were submitted, including over 800 proposals in fibre transmission, access network, NGN, IP Quality of Service (QoS) and security and more than 1,500 proposals in mobile core network, service application and radio access.
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Financial Indicators
Table: Huawei Technologies Audited Five-Year Financial Summary, 2003-2007 (US$mn)
Year ended December 31 Revenues Operating Income (PTOP) Net Income R&D Expenditure Capital Expenditure Total Assets
2003 2,694 na 384 389 na na
2004 3,827 697 624 480 na 4,749
2005 5,982 851 681 na na 5,754
% chg 56.3 22.1 9.1 na na 21.1
2006 8,504 621 512 na na 7,496
% chg 42.2 -27.0 -24.8 na na 30.3
2007 12,560 867 674 na na 10,590
% chg 47.7 39.6 31.6 na na 41.3
Employees*
22,000
24,000
40,000
66.7
61,000
52.5
81,000
32.8
Revenue/Employee (US$000) PTOP/Employee (US$000)
122.5 na
159.5 29.0
149.6 21.3
-6.2 -26.6
139.4 10.1
-6.8 -52.6
155.1 10.7
11.2 6.0
Key Ratios (%) PTOP: Revenues R&D: Revenues na 14.4 18.2 12.5 14.2 na 7.3 na 6.9 na -
Note: All financial data are presented in accordance with International Financial Reporting Standards (IFRS). Solely for the convenience of comparison, the consolidated financial statements for 2007 have been converted to US dollars at the rate of US$1 = CYN7.3046 (2006: US$1 = CYN7.8041; 2005: US$1 = CYN8.0702). * Approximate figures. Source: Huawei Technologies
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Huawei Technologies Annual Revenues And Operating Income (US$mn) 2003 2007
14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 2003 2004 2005 2006 2007 200 0 600 400 1000 800
Revenues Operating Income

Table: Huawei Technologies Annual Contract Sales By Geographic Area, 2003-2007 (US$bn)
Year ended December 31 China International Total
2003 2.78 1.10 3.83
% total 72.6 28.7 100.0
2004 3.30 2.28 5.58
% total 59.1 40.9 100.0
2005 3.40 4.80 8.20
% total 41.5 58.5 100.0
2006 3.85 7.15 11.00
% total 35.0 65.0 100.0
2007 4.50 11.50 16.00
% total 28.1 71.9 100.0
Huawei Technologies Annual Contract Sales By Geographic Area (US$bn) 2003 2007
18.00 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00 2003 2004 2005 2006 2007 China International
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Corporate Strategy
Huawei Technologies corporate aim is to focus on its customers' market challenges and needs by providing excellent communications network solutions and services in order to consistently create maximum value for customers. The company has four branches to its Customer Focus Strategy: ! !
Customer demand is the fundamental driving force of Huawei's development;
High quality, excellent service, low operating costs and giving top priority to meeting customer requirements to enhance their competitiveness and profitability;
Continuously performing management transformation to realise efficient process-based organisation operation for ensuring high quality end-to-end delivery; and
Developing with its peers in the industry as both competitors and partners to jointly create a favourable environment and share the benefits of the value chain.
Over the next four years, Huawei is committed to reinforcing its leadership in ALL IP-based fixed mobile convergence (FMC) solutions, to assist operators in entering the age of ALL IP FMC. In recent years, operators around the world have established their transformation strategies based on ALL IP-based network convergence innovation. By using mature ALL IP solutions that are operable and manageable on a large scale, they hope to realise network transformation quickly to provide more value-added services, while taking over traditional services. Huawei aims to become the operators reliable partner for their network transformation.
Huawei will continue to focus on network convergence, open innovation and smooth evolution and help operators build future-oriented architecture, increase network value and continuously drive network evolution towards ALL IP. The company understands the trend of ALL IP FMC and has formulated a clear investment and development strategy. It will draw on its years of experience, not only in the area of IP, but also in fixed and mobile networks. To maintain leadership in ALL IP FMC, Huawei has set up an integrated core network product line, with 6,000 engineers engaged in R&D. The company also has allaround (fixed, mobile and IP) technologies and experience and is one of the strongest vendors of core network products, thus enabling it to help customers realise larger network value and a sharper competitive edge. Huaweis core network product line has a service team of 2,000 employees around the world to provide customers with all-round consultation, planning, delivery, maintenance and training services.
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Meanwhile, Huawei has established strategic partnerships with 1,500 companies around the world and cooperates with them on the foundation of its self-developed technologies. The company works closely with multinational companies, such as Motorola, IBM, Intel, Agere, ADI, Altera, Sun, Microsoft, Oracle and HP, to improve the time to market of its products and to incorporate the latest technologies and best management practices into the company.
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Company Timeline
Huawei Technologies Corporate Timeline, 1990-2008
Date 1990
Event Huawei Technologies was established as a high-tech enterprise specialising in the research and development (R&D), production and marketing of communications equipment for telecoms operators of optical, fixed, mobile and data communications networks.
1988-1991 Huawei acted as a reseller for the HAX switch. 1992 1995 1996 Huawei commenced development of the C&C08 PSTN switch. In the management environment, the company achieved ISO 9001 certification. Huawei also established a Beijing R&D centre. Huawei launched its first datacom product in the form of the Quidway 2501 router. Huawei also established a Shanghai R&D centre and launched the HONET integrated access network and optix SDH equipment. Furthermore during 1996, Huawei won the first overseas contract from Hong Kong's HutchisonWhampoa to provide fixed-line network products. 1997 The C&C08 switch successively entered the markets of such European countries as Lithuania, Latvia, Estonia, Kazakhstan, Uzbekistan and Bulgaria. Huawei also launched a full series of GSM equipment. Furthermore during 1997, Huawei established joint R&D labs with Texas Instruments, Motorola, IBM, Intel, Agere Systems, Sun Microsystems, Altera, QUALCOMM, Infineon and Microsoft. 1998 1999 2000 2001 Huawei commenced R&D into W-CDMA technology and established the Nanjing R&D centre. Huawei established its Bangalore R&D centre. Huawei launched its high-end routers and also established R&D centres in the Silicon Valley and Dallas, US. Huawei's first W-CDMA systems were deployed in trial applications, and it also became a member of the International Telecommunication Union (ITU). Avarisys, a subsidiary of Huawei Technologies, was sold to Emerson for US$750mn. 2002 In June, Huawei launched FutureWei, its wholly owned US subsidiary, which underscored the company's commitment to international business development and long-term investment in the North American market. Headquartered in Plano, Texas, FutureWei is a total network solutions provider, specialising in the development, design and marketing of a wide range of carrier and enterprise class telecoms products. In October, Huawei established a joint venture with 3Com to deliver enterprise data network. Huawei signed a mutual distribution agreement with Marconi in the UK. The agreement, which followed an earlier memorandum of understanding (MoU), allowed the two companies to resell parts of each other's product portfolio. Marconi would resell Huawei's carrier class data communications products to telecom services providers only under the Marconi brand, while Huawei would resell Marconi's microwave radio, including next generation microwave radio equipment and associated network services for Huawei's wireless network projects. In October 2005, Ericsson acquired the majority of Marconi's assets. Huawei won a licence to produce and sell mobile phones to consumers in China. 2005 In July, Cisco Systems settled its lawsuit against Huawei and its subsidiaries, Huawei America and FutureWei Technologies, that was pending in the US District Court for the Eastern District of Texas. Cisco filed an intellectual property lawsuit against Huawei and its subsidiaries in January 2003 in which it claimed that its Chinese rival, not only copied protected parts of Cisco technology, but also infringed on at least five patents. Under the terms of the settlement, Huawei agreed to change its command line interface, user manuals, help screens and portions of its source code to address Cisco's concerns.
2003 2004
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Financial terms were not disclosed, but each party had to pay its own legal fees. Completion of the lawsuit followed a third-party review of Huawei's products, plus: Huawei discontinuing the sale of products at issue in the suit; Huawei agreeing to only offer for sale new, modified products on a worldwide basis; and Huawei submitting its relevant products for review by a neutral third-party expert. In October, PCCW and SUNDAY Communications received confirmation from Huawei that the company intended to cast its votes in favour of a Scheme of Arrangement. The scheme would see PCCW acquire Huawei and other public shareholders' shares in SUNDAY, making the company a wholly owned subsidiary of PCCW Mobile. At the time of the announcement, PCCW Mobile owned 79.35% of SUNDAY, with Huawei owning 9.91% and other public shareholders owning 10.74%. The proposal would only become binding if it was approved by no less than 75% of independent shareholders. Huawei voted in favour of the plan in December 2005. In November, Huawei established an R&D centre in Israel. About 15 R&D personnel would be employed at the centre. In the same month, Huawei also unveiled its first 3G mobile phones. The three models became commercially available from February 2005. Furthermore, Huawei reached a US$360mn loan deal with 29 banks in November. The three-year term loan and revolving loan without security would help Huawei expand its international market presence. While the Commonwealth Bank of Australia, ABN Amro, HSBC and Bank of China initiated the loan, 25 other banks from across the world also subsequently participated. In December, Huawei entered into a financing deal with China Development Bank (CDB). Under the deal, CDB offered a US$10bn credit facility to Huawei and to its overseas customers. This would facilitate the companys international expansion activities over the next five years. Huawei also established a joint venture with Siemens to develop TD-SCDMA mobile communication technology targeted for the China market during 2004. 2006 In February, Nortel Networks and Huawei entered into a MoU with the intent to establish a joint venture for developing ultra broadband access solutions for markets around the world. In February, 3Com purchased an additional 2% interest in Huawei-3Com (H3C) from Huawei. The sale was completed on January 27, following final approval from the government of the People's Republic of China, resulting in 3Com owning 51% of the venture and Huawei owning the remaining 49%. Previously, 3Com reached an agreement with Huawei to gain majority control of the venture, subject to Chinese government approval and usual closing conditions, in October 2005. 3Com agreed to pay Huawei US$28mn in consideration for 2% of the outstanding shares of H-3C owned by Huawei an amount that was established as part of the original H-3C formation agreements as a not-to-exceed price. In July, Motorola and Huawei announced a new collaboration to bring an enhanced and extensive portfolio of UMTS and HSPA infrastructure equipment to customers worldwide. In October, Huawei and Global Marine Systems announced a partnership to jointly develop a new generation of end-to-end submarine networking solutions. The partnership would combine Huaweis optical solutions and Global Marines subsea repeaters and submarine engineering. In November, 3Com agreed to buy Huawei's 49% stake in H3C for US$882mn. 2007 In January, Huawei and QUALCOMM successfully completed the industry's first commercial Multimedia Broadcast Multicast Service (MBMS) mobile TV interoperability testing (IOT), a mobile TV solution based on 3GPP Release 6. In May, US-based Symantec and Huawei announced plans to form a joint-venture company geared towards developing and distributing security and storage appliances to global telecoms carriers and enterprises. Headquartered in Chengdu, China, the company would be 51% owned by Huawei, with Symantec holding a 49% stake. Huawei would contribute its telecoms storage and security businesses, including its integrated supply chain and integrated product development management practices. Additionally, the new company would have access to Huawei's intellectual property (IP) licences, R&D capabilities and manufacturing expertise and engineering talent, which includes more than 750 employees. Meanwhile, Symantec would contribute some of its enterprise storage and security software licences, working capital, and its management expertise into the new company. Symantec would also contribute US$150mn towards the growth and expansion of the joint venture, which was expected to be finalised in late 2007, pending the receipt of regulatory and governmental approvals. Also in May, Huawei entered into a strategic partnership with the Bahrain Telecommunications
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Company (BATELCO) to extend and improve the existing relationship between the two groups, while facilitating the best possible commercial terms, knowledge transfer and marketing processes. The relationship agreement is valid until December 31 2009. In September, private equity firm Bain Capital Partners and Huawei agreed to buy 3Com in a US$2.2bn deal that would give Huawei a 16.5% minority stake and an option to increase its stake by up to an additional 5%. 2008 In February, Huawei and Bain Capital Partners withdrew their proposal to acquire 3Com after failing to win approval from The Committee on Foreign Investment in the United States (CFIUS), a panel led by the US Treasury Secretary that reviews corporate deals with foreign buyers. In June, Huawei began seeking a buyer of a 49% stake in its mobile device division. Several equity firms expressed interest in the division, but by September Bain Capital and Silver Lake Partners were believed to be leading the list of potential buyers.
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Company Activity
Recent Major Developments
September 2008 Huawei, in collaboration with Vodafone, announced the launch of the industrys first 3G/2G Software Defined Radio (SDR) Single RAN product. It is one of the first products from the companies Radio Mobile Innovation Centre in Madrid, Spain. In either 2G, 3G or mixed mode, the solution is designed to enable operators to make significant capital expenditure and operating expenditure savings because they only need to deploy a single Radio Access Network base station, compared to the costs involved with two independent 2G and 3G networks. Paving the way for technology evolution as well as protecting operators network investment, Huaweis Single RAN solution is also capable of seamlessly migrating to long-term evolution (LTE).
September 2008 Huawei announced that in Q208 it delivered 55 standard proposals to the IEEE 802.16m, more than any other vendor, and that it submitted 568 proposals to the WiMAX Forum, the second largest number of submissions by a single company. Huawei began investing in IEEE802.16 standard technologies in 2000 and became a member of the WiMAX Forum in 2004. As of August 2008, Huawei had signed 29 WiMAX commercial contracts and had deployed over 35 WiMAX trials around the world.
September 2008 Huawei was identified as being among the six vendors that had submitted technical and financial bids to Indias Bharat Sanchar Nigam Ltd (BSNL) for its contract to supply 93mn GSM lines. The contract will be spread over three to four years; the initial phase will be awarded by the end of 2008 or in early 2009 and will consist of about 33mn lines. Huawei is competing against Ericsson, Nokia Siemens Networks, Nortel Networks, Alcatel-Lucent and ZTE for the contract, which will be split between several suppliers.
September 2008 Private equity groups led by Bain Capital and Silver Lake Partners were reported to be leading the negotiations to take a stake in Huaweis mobile phone division. General Atlantic reportedly withdrew from the discussions. Kohlberg Kravis Roberts (KKR) and Blackstone Group had been shortlisted in the talks, but did not pass the first round. Huawei is understood to be looking to sell a 49% stake in the business, but could sell a majority stake if the price is right. The sale is being arranged by Morgan Stanley. Huawei said it would not invite strategic partners to submit bids to avoid competition in the industry. Huaweis mobile devices division produces handsets, data cards, DSL modem and home gateways, convergence terminals and video products. The company currently outsources the production of its handsets to Thailand-based Cal-Comp Electronics and Flextronics in Singapore.
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The mobile device business accounted for 16.4% of Huaweis total revenue in 2007, compared to 11.8% in 2006.
August 2008 China Telecom was reportedly close to announcing the winners of the first phase of its CDMA network expansion project. In the Chinese governments restructuring of telecoms operator, China Telecom is to acquire China Unicoms CDMA network for CNY110bn (US$16bn). In addition to Huawei, Alcatel-Lucent, ZTE, Nortel Networks, Motorola and Samsung have provided equipment to China Telecom for evaluation. China Telecom is seeking bids for a total of 81 tenders, which include solutions for roll-out of CDMA EVDO capabilities. China Telecom is expected to invest as much as CNY80bn (US$11.6bn), expanding the CDMA networks over a three-year period.
August 2008 3Com filed a lawsuit to seek a US$66mn break-up fee under its now-terminated US$2.2bn buyout by private equity firm Bain Capital and Huawei. The deal was called off after some US lawmakers said they object to the acquisition because it would put anti-hacking technology used by the Pentagon in Chinese hands.
July 2008 Huawei announced the successful development of its 100G wavelength division multiplexing (WDM) prototype. With a transmission distance of up to 2,000km without using electrical regenerators, Huaweis 100G WDM prototype supports smooth upgrades from 10G/40G technologies. This product is expected to further promote and accelerate the commercial use of 100G WDM-based solutions.
July 2008 It was reported that Sierratel, the state-owned CDMA network operator in Sierra Leone, would receive a US$17mn loan from China. As part of this loan, Huawei would be awarded a contract to expand the network to boost services in rural and suburban areas.
April 2008 Huawei and Qualcomm announced the completion of Europes first multimedia broadcast multicast service (MBMS) field trial, carried out in conjunction with Telecom Italia. MBMS technology is based on 3GPP standards and supports multicast and broadcast services, allowing speeds of up to 256Kbps on a mobile device. The trial, which was conducted by means of Huaweis MBMS solution, together with handsets powered by Qualcomms MSM7201A chipset, demonstrated MBMS services deliveries of between 128Kbps and 256Kbps under various indoor and outdoor MBMS channel conditions.
February 2008 Huawei and private equity firm Bain Capital Partners withdrew their US$2.2bn proposal to acquire 3Com after failing to win approval from The Committee on Foreign Investment in the United States (CFIUS), a panel led by the US Treasury Secretary that reviews corporate deals with foreign buyers. In September 2007, Bain agreed to buy 3Com in a deal that would also give Huawei a 16.5% minority stake. Huawei could increase its stake in 3Com by up to an additional 5%.
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Industry analysts were surprised the deal did not go through given that 3Com had seemed ready to divest a sensitive unit that makes network protection systems for government agencies and large businesses. Under Bains proposal, Huawei would not have had operational control of 3Com or access to sensitive US technology. But several US lawmakers complained the deal threatened national security due to Huaweis alleged ties to the Chinese military.
February 2008 Huawei, Qualcomm and Telefonica Espana announced the completion of a 3G UMTS and HSDPA field trial using 900MHz spectrum in Talarrubias in the Extremadura region of Spain. The trial results validated that UMTS can co-exist with GSM at 900MHz. Furthermore, it was proven that the propagation advantage of 900MHz may be used to extend the significant spectral efficiency gains of UMTS for voice and data coverage relative to 2100MHz that is currently used in European 3G markets.
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Supply Contracts, 2007-2008

Huawei Technologies Selected Supply Contracts, September 2007-2008
Date Sep 2007
Country India
Customer Bharti Airtel Lanka
Details Bharti Airtel Lanka, a subsidiary of Bharti Airtel, signed a managed networks deal for its Sri Lanka operations with Huawei. The three-year deal is valued at approximately US$150mn and includes the provision of telecoms applications and software. The latest custom-built technology from Huawei is expected to reduce Bharti Airtel's total cost of ownership (TCO), as well as enhance its competitive edge. Specifically, Huawei's Distributed Node B will enable Bharti to deploy the network faster and more cost-effectively. Bharti Airtel was recently awarded a licence to provide 2G and 3G mobile services in Sri Lanka. Under the agreement, Huawei will deploy and manage Airtel's core network, Node-Bs and BTSs and end-to-end 2G/3G network solutions.
Sep 2007
Poland
PTK Centertel Huawei was awarded a UMTS/HSPA contract by Orange Poland. The (Orange Poland) contract reaffirms Huawei's position as a significant 3G supplier to PTK Centertel, with a 50% share of the operator's UMTS Terrestrial Radio Access Network (UTRAN). Over the next three years, Huawei will deploy its new generation Node B solution across Poland's major cities. Huawei's new generation Node Bs support full-performance HSDPA, HSUPA and IP-based Radio Access Network (IP RAN). As a result, customers are expected to get better access to the latest 3G services and mobile Internet.
Sep 2007
Japan
eMobile
Huawei sealed a network expansion contract with eMobile following the commercial launch of Japan's first IP-based HSDPA radio access network for the operator. Under the new agreement, Huawei would provide eMobile with HSPA technologies and expand the network to cover the vicinity of Tokyo, Osaka and Nagoya. More than 2,300 distributed node Bs would be deployed, including the indoor distributed base station system (iDBS), which will provide eMobile with large-scale coverage in Tokyo's subway and business areas. Huawei has been working with eMobile since July 2006 when eMobile selected Huawei as the key partner for its 3G network construction the first IP-based HSPA network in Japan. In phase one, Huawei deployed a HSPA network with over 1,000 node Bs for eMobile, covering major cities in Japan, including Hiroshima and Sapporo.
Oct 2007 Hungary
Vodafone
According to local reports, Vodafone decided to replace its 3G network provider in Hungary, Nokia Siemens Networks, with Huawei. Huawei will build the new network for a nominal price, according to a report in the Hungarian daily Nepszabadsag. The paper did not disclose its sources and said that the companies involved neither denied nor confirmed the information.
Oct 2007 US-Canada
Hibernia Atlantic Hibernia Atlantic, the only diverse Transatlantic submarine transport cable provider, and Huawei announced that Hibernia Atlantic was the first to offer native 40Gbps capacity over a subsea span between Boston, Massachusetts (US) and Halifax, Nova Scotia (Canada). Hibernia Atlantic deployed Huawei's latest products to allow this significant capacity upgrade over a subsea, international cable link. This cable was built in 2000 with a 192-channel, 10Gbps system capacity. As part of ongoing network improvements, the Huawei solution upgraded the Hibernia
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Atlantic cable to a 192-channel, 40Gbps system, increasing the capacity from 1.9 Terabytes to 7.68 Terabytes using 40Gbps technology. Huawei accomplished this upgrade with its internally developed, 40Gbps integrated solution, which includes its patented DRZ/ODB technologies. DRZ technology leverages widely available components, maximising reliability while also assuring a robust supply chain. Huawei's 40Gbps transponder features automatic electrical dispersion compensation, eliminating the need for DCM modules. Partnering with Huawei on this test was Anritsu, which supplied the MP1591A network performance tester for the deployment test, while the MP1595A 40G SDH/SONET analyser provided the flexibility of service types and mapping needed to validate the subsea span. Oct 2007 China China Mobile Huawei announced that it had successfully built the world's first IP-based base station system (IP BSS) commercial network for China Mobile Communications, helping the operator reduce its capital and operating expenditures by network transformation from GSM towards an All IP infrastructure. The IP BSS commercial network uses IP to transmit voice and data services, avoiding the cost of rebuilding TDM transmission, while meeting the requirements of increased data transmissions, as well as preparing China Mobile for the eventual roll-out of 3G. At the heart of the IP BSS solution is a new generation base station controller, the BSC6000, which is based on IP architecture and can be used with 3G equipment for hybrid networking. Huawei's IP BSS solution reduces carrier's capex and opex by using TDM transmission resources to transmit voice and IP transmission resources to transmit data services. By adopting IP transmission, an operator's transmission costs can be reduced by 40%, while relying on existing E1 transmission resources. Nov 2007 Saudi Arabia Mobily Huawei was selected by Etihad Etisalat (Mobily), Saudi Arabias second mobile network operator, to construct its nationwide IP bearer network for voice and data services. The value of the contract was not disclosed. Mobily deployed Huaweis core routers NetEngine 5000E and NetEngine 40E, as well as its iManager N2000 DMS and NSM network management systems. The Huawei solution enables the delivery of a wider range of subscriber services while paving the way for Mobily to evolve towards and a more adaptable, cost-efficient, All-IP network environment. Dec 2007 Tajikistan Babilon-T Huawei was selected by Babilon-T, the largest telecoms operator in Tajikistan, to deploy Central Asia's first commercial WiMAX network. Under the terms of agreement, Huawei provided an end-to-end mobile WiMAX network, including distributed base station, wireless access service node-gateway, network management equipment and terminals. The network covers the four major areas of Tajikistan, including its capital Dushanbe. Roll-out started immediately and the network was launched in Q108. Dec 2007 Germany, UK, Austria, Netherlands and Czech Republic US T-Mobile International Huawei was selected by T-Mobile International to provide Packet Switched Core Networks (PS-CN) across five key European countries: Germany, the UK, Austria, the Netherlands and the Czech Republic. The contract requires Huawei to replace existing networks with its next generation PS-CN equipment. MetroPCS MetroPCS, which specialises in offering flat-rate, no contract wireless services, signed a deal with Huawei to make the M318 handset available to all of its customers. The deal gave Huawei a foothold in the US market.
Dec 2007
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Jan 2008
Bulgaria
TransTelecom
TransTelecom chose Huawei to deploy a commercial WiMAX network, covering central business districts and hotspots in the country's major cities, including its capital, Sofia, and Varna, Bulgaria's largest harbour city. Huawei supplied an end-to-end WiMAX solution working on the 3.5GHz frequency band, including terminals, as well as a major upgrade of the TransTelecom central exchange equipment for the operation of a fully mobile WiMAX network in 2008. In 2006, TransTelecom deployed a 16d-based WiMAX network to meet the country's increasing broadband needs, and the operator has chosen Huawei to deliver an upgraded 16e-based network. Huawei's 16e-based WiMAX solution integrates the most advanced technologies such as multiple-input multiple-output (MIMO) and orthogonal frequency division multiple access (OFDMA), which features high bandwidth, wide area coverage, large capacity, as well as providing better mobility. Huawei's new base stations enable TransTelecom to quickly roll out innovative new services to its customers, while reducing Total Cost of Ownership (TCO).
Jan 2008
Brazil
Oi
Tele Norte Leste Participacoes (Oi) signed contracts with Huawei and Nokia Siemens Networks for the installation of 3G wireless infrastructure across 18 states. The deals were reportedly worth approximately US$565mn in total. During the course of 2008, Oi plans to install 3G services in 53 municipal areas, as well as establish a wireless and 3G network in Sao Paulo, having recently won frequencies to operate in that state. The nucleus of the network will be supplied by Nokia Siemens; the company will supply half of the necessary equipment as well. Huawei will provide the remaining equipment.
Jan 2008 Jan 2008 Feb 2008
India
According to The Economic Times, RCOM had placed an order worth Reliance Communications US$500mn for network infrastructure with Huawei. No further details were provided (RCom) Oman Mobile Sonaecom Oman Mobile selected Huawei to build a 3G mobile network after it submitted the lowest bid of OMR17.7mn in a tender. Sonaecom announced plans to invest EUR240mn during the next three years in an open-access fibre-to-the-home (FTTH) network that will reach 25% of Portugals population. The company plans to pass 1mn homes with a new GPON roll-out using equipment from Huawei and Nokia Siemens Networks and construction services from Redtel and CBE. Rwandatel and Huawei signed a RFW19.2mn (US$35mn) network expansion contract. The agreement reportedly included GSM equipment, which allowed the fixed-line telecom company to branch into the wireless market for the first time. Huawei was selected by China Unicom to deploy and upgrade its CDMA network involving more than 1,600 carrier frequencies. The network covers Tianjin City in North China. Under the agreement, Huawei will deliver an end-to-end All IP solution including radio access equipment and core network. Huawei's solution will boost the network and enable the provision of voice and data service with better performance and wider coverage. The technology will support the smooth evolution to CDMA 1x EV DO.
Oman Portugal
Feb 2008
Rwanda
Rwandatel
Feb 2008
China
China Unicom
Mar 2008
China
China Netcom
Huawei announced that it was to supply nearly 40% of China Network Communications (China Netcom)s optical access solutions making it the operator's largest partner in the optical field. According to the contract, Huawei will provide its optical access equipment, the SmartAX MA5600T series, which, according to Huawei, is the only system in the industry that enables real blockless terabit full-optical access.
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It satisfies customer requirements for ultra-wide bandwidth with a unified full-optical access platform to access the PON and P2P traffic and provides more choices for the customer increasing their user experience, enabling China Netcom to provide innovative multi-play services to its subscribers, including voice, video and data services. Mar 2008 India BPL Mobile BPL Mobile awarded Huawei a US$20mn contract to supply GSM-based equipment for one year. Under the agreement, Huawei will install next generation network (NGN) infrastructure and deploy GSM base station subsystems, microwave stations and routers for BPL Mobile in the Mumbai circle. Mobily signed a three-year outsourcing deal with Huawei, Alcatel-Lucent and Ericsson under which the vendors will manage, operate and maintain its mobile networks. Etapatelecom contracted Huawei to deploy a next generation network (NGN) covering Cuenca, Quito and Guayaquil, according to the local newspaper El Mercurio. Etapatelecom planned to invest US$1.24mn in a deployment of the NGN, providing internet, voice and value-added services, and expected it to be operational by July 2008. Huawei was chosen by Etisalat to build a large-scale commercial fibre-tothe-home (FTTH) network. The planned GPON FTTH network by Etisalat will provide ultra-high-speed connectivity for families and businesses through the use of optical line terminal (OLT) and optical network terminals (ONT). These terminals can accommodate various application scenarios such as commercial buildings, residential apartments and villas. By the end of 2008, Etisalat expects its customer base with direct access to FTTH to be in the hundreds of thousands. Etisalat has crafted an All-IP strategy to drive business and network transformation, rolling out last-mile connectivity using FTTH to replace the current network with optical fibre technology. With Huawei's GPON FTTH solution, Etisalat believes it can fully meet the current and future demand for ultra-high bandwidth access while delivering a better service experience for its customers. Apr 2008 Italy Telecom Italia Huawei announced that it will provide access network components to help Telecom Italia deploy a next generation network (NGN) in the Milan area. Huawei will provide Telecom Italia with its fibre-to-the-building (FTTB) solution, comprising SmartAX MA5600Tand MA5606T, which incorporates GPON and VDSL2 (Very High Bit-rate Digital Subscriber Line) technologies. These technologies enable broadband connection speeds of up to 100Mbps, delivering better ultra-broadband experiences to the operator's customers. The solution is built on Terabit architecture, which provides a future-proof platform for Telecom Italia to roll out additional ultra-broadband services. Apr 2008 Germany O2 Germany O2 Germany chose Huawei as one of its partners for the expansion of the O2 mobile network in Germany. The agreement includes both the replacement of existing base stations and the planned construction of more than 8,000 base stations by Huawei for GSM and UMTS. The objective of the partnership is to increase the GSM network coverage of O2 in Germany to almost 100% and subsequently be in a position to exclusively supply O2 mobile customers with the company's proprietary network resources. Expansion steps taken by Huawei are to be completed by the end of 2009. At the same time, the infrastructure for the use of mobile data services will be expanded. O2 plans to increase the UMTS supply in Germany to 60%. In addition, the company will expand the HSDPA network and implement HSUPA technology based on Huawei's solutions.
Mar 2008 Mar 2008
Saudi Arabia Mobily
Ecuador
Etapatelecom
Apr 2008 UAE
Etisalat
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Apr 2008 Philippines
BayanTel
Huawei was awarded a CDMA network expansion contract by Bayan Telecommunications (BayanTel). Under the agreement Huawei will provide an advanced All-IP CDMA2000 end-to-end solution for the operator, including core network, intelligent network, transmission and microwave products. MobileOne (M1) chose Huawei to expand and upgrade its mobile phone and data transmission network over the next five years. Huawei will be responsible for the deployment of all of the operators All-IP GSM, 3G, HSPA and LTE systems.
Apr 2008 Singapore
MobileOne
May 2008
Hungary
Magyar Telekom Huawei installed a 2,700km next generation WDM backbone network for Magyar Telekom. The backbone, which covers all of Hungary, including the capital city Budapest, is based on Huaweis OTN/ASON-based WDM platform and enables Magyar Telekom to migrate from providing traditional voice-oriented services through its previous DWDM system to providing next generation data-oriented services to its customers. The network increased transmission bandwidth to 10Gbps per channel, which can be quadrupled to 40Gbps/channel. Telecom Italia Nautilus (MedNautilus) Huawei completed the upgrade of MedNautilus DWDM submarine network. The upgrade of transmission capacity allows up to 640Gbps per fibre pair and transmission rates of between 2.5Gbps and 10Gbps per second. The network upgrade is designed to help MedNautilus expand its transmission capacity, ready for future ultra-broadband service deployments.
May 2008
Italy
May 2008
Singapore
StarHub
StarHub selected Huawei to expand and upgrade its national 3.5G mobile network with HSPA+ technology by Q209. HSPA+ will raise the cellcos mobile broadband speeds from 14.4Mbps to 21Mbps (downlink) and increase uplink capability from 1.9Mbps to 11Mbps. In addition, StarHub plans to expand its mobile base station capacity to at least 3,500 base stations. Huawei successfully deployed what it claimed was the industrys longest 40Gbps commercial transport network. Built for TTC, the 1,141km network connects Moscow and St Petersburg and requires no electric regeneration. The network uses Huaweis patented SuperWDM technologies to achieve ultra-long-haul transmission without electrical regeneration at distances of over 1,500km. Huawei says its patented C-band extension technology can help operators increase their fibre transmission bandwidth by an extra 20%, making it the only vendor with a transmission capacity of 3.84Tbps, which it claimed is the largest in the industry.
May 2008
Russia
TransTeleCom (TTC)
Jun 2008
Bangladesh
Grameenphone
Huawei signed a contract with Grameenphone to expand the capacity and provide enhancements for a next generation GSM core and radio network. The All-IP core network solutions will help Grameenphone build a more robust and flexible mobile network with simplified architecture that is highly reliable. Huawei's fourth generation multi-platform All-IP solutions will enable the convergence of radio access networks, providing a smooth evolution to 3G and future access technologies. The companies did not reveal the value of the deal, but company sources said it was worth in excess of US$500mn over the next three years.
Jun 2008
Hong Kong
PCCW
Huawei was selected by PCCW to help deploy Hong Kong's first CDMA2000 1X/1xEV-DO Rev A network. Under the terms of agreement, Huawei will provide its fourth generation CDMA base transceiver station (BTS) solution to help PCCW construct a CDMA2000 1xEV-DO Rev A network. Huawei's fourth generation BTS features multi-standard convergence, high integration, All-IP, energy conservation and environmental protection and fully meets PCCW's business requirement for long-term development as it is designed to reduce the operator's
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operational costs and ensures it can evolve smoothly beyond 3G in the future. Jun 2008 Tanzania Excellentcom (T) Excellentcom (T), trading as HiTS Tanzania, the seventh telecom company (HiTS Tanzania) to enter the Tanzanian market, signed a US$180mn contract with Huawei. Under the terms of the agreement, Huawei would start building HiTS Tanzanias network to enable it to cover the whole country within 13 months. HiTS Tanzania obtained licences for national network facilities, national network services and national application services from the Tanzania Communications Regulatory Authority in September 2007. These licences allow the company to operate voice and data services using mobile communication technologies. Jun 2008 Malaysia Asiaspace Asiaspace contracted Huawei to supply an end-to-end WiMAX solution. Asiaspace will spend MYR500mn over the next three to five years on the deployment of its wireless broadband services. Network roll-out will begin in the Klang Valley before reaching other cities and urban areas both north and south of the West Coast of the Peninsular, with network coverage in the East Coast expected in 2009. By the end of 2008, Asiaspaces WiMAX network should cover a minimum of 25% of the population under licence conditions, before meeting its target of 30% and 40% by 2009 and 2010, respectively. Under the terms of the contract, Huawei will design and install the WiMAX network, including base stations, gateways and management systems.. Jun 2008 Jun 2008 Syria Syrian Telecoms STE awarded Huawei a EUR877,000 contract to install 33,000 new ADSL lines in Syria, according to The Syria Report Newsletter. Establishment (STE) Telkom chose Huawei to roll out a WCDMA-based high-speed wireless network with a capacity for at least 100,000 connections. Telkom plans to initially use the network for fixed-wireless services, but will enhance it to launch 3G mobile services in the future. Deployment had already begun and the first fixed-wireless users were expected to be connected in September, in Gauteng province, with roll-outs to continue in other areas in due course. Jul 2008 Pakistan Mobilink Huawei was selected by Mobilink to deploy a commercial WiMAX 16e network. The network will cover central business districts and hotspots in the country' s six major cities, including Islamabad, Karachi, Sialkot, Faisalabad, Lahore and Rawalpindi. Under the terms of the contract, Huawei will provide Mobilink with a complete WiMAX solution including distributed base stations, an access service network-gateway and a network management system. Jul 2008 Kenya Jul 2008 Ecuador Safaricom Andinatel Huawei signed a multi-million dollar deal with Safaricom to provide 3G equipment. Andinatel announced that two tenders for the supply of broadband access equipment had been won by Huawei and Alcatel-Lucent. Huawei will provide 24,000 wireless broadband terminals based on Wi-Fi technology, while Alcatel-Lucent will supply equipment for 36,000 fixed broadband connections. The orders support the second stage of Andinatels project to expand high-speed services across its 13-province footprint by Q408. Huawei was selected by China Telecom to build China's first 40G Wavelength Division Multiplexing (WDM) transmission network between Shanghai and Wuxi. Under the terms of the contract, Huawei will provide China Telecom with an ultra-high-capacity 80 wavelengths x 40G transmission solution capable of 10G/40G hybrid transmission to address China Telecom's increasing
South Africa Telkom SA
Aug 2008
China
China Telecom
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internet bandwidth requirements and to lay a foundation for providing highbandwidth services. According to Huawei, its 40G transmission solution provides the most comprehensive coding technologies in the industry, delivering the most cost-effective solutions across different application scenarios. Huawei's patented SuperDRZ technologies supports ultra-long-haul transmission of up to 1,500km without the need for regeneration. The 40G transmission solution also adopts Huawei' s unique C-band extension technology, which increases the fibre transmission bandwidth by an extra 20% and enables the DWDM system to boast a transmission capacity of 3.84Tbps, which is the largest in the industry. Sep 2008 Pakistan Telenor Pakistan Huawei announced the deployment of the world' s largest next generation home location register (HLR) solution for Telenor Pakistan. According to Huawei, the next generation HLR, which will serve 40mn subscribers, enables Telenor Pakistan to improve its network efficiency, simplify its operations and enhance its customer service experience, in turn reducing operating and transmission costs by 60% and 70%, respectively. Huawei' s HLR solution is fully distributed and has been deployed in the country' s three major cities of Islamabad, Karachi and Lahore. As a result, Telenor Pakistan is able to unify the management of subscriber information such as number resources and simplify the maintenance of its network. Sep 2008 Egypt Etisalat Misr Huawei signed an official contract to expand the network of Etisalat Misr. Huawei will provide an end-to-end solution to build wireless access, core and transmission facilities to improve the capacity and coverage of Etislat Misrs mobile network. Warid Telecom deployed Pakistan's first solar-powered base transceiver station (BTS) site using Huawei's Solar Powered Macro Base Station. Huawei's environmentally friendly Solar Powered Macro BTS allows the operator to extend its network reach into remote areas of the country where there is limited access to the electricity grid. Huawei and ZTE won contracts to expand the networks of state-run mobile operator Libyana. A US$58mn deal will see the two vendors expanding the capacity of the existing network to 6.5mn lines. A second deal worth US$17mn will see Huawei install the first phase of a fibre network for Libyana in the capital Tripoli. Huawei was chosen by AXIS, Indonesia' s newest GSM and 3G operator, as a key partner in rolling out its full service national network. Under the agreement, Huawei will design, build, deploy and manage AXIS' 2G/3G network on the islands of Java, Bali, Lombok, Kalimantan and Sulawesi for a period of three years to 2010. Specifically, Huawei will be responsible for close to 4,000 sites across the country, using GSM and 3G radio access, optical and microwave transmission technologies. In addition, Huawei will also provide a nationwide core network and intelligent network (IN) system to AXIS. Following its launch in February 2008, AXIS is now available in over 90 cities, covering around 25% of the population. It has over 2,000 base stations on air and over 1mn customers. As part of its national network expansion programme, AXIS is planning to build over 8,000 base stations by end 2010 with national coverage achieved by 2009. For the network expansion project, AXIS will deploy Huawei's single RAN solution, including the unified fourth generation BTS platform, which can support multi-mode radio access between GSM & 3G, as well as allowing future seamless evolution to HSPA+ and LTE.
Sep 2008
Pakistan
Warid Telecom
Sep 2008
Libya
Libyana
Sep 2008
Indonesia
AXIS
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SWOT Analysis
Huawei Technologies SWOT
Strengths
! !
Huawei is Chinas biggest maker of telephone network equipment Huawei Technologies is a strong global player; its products and solutions are deployed in over 100 countries, and the company serves 35 of the world's top 50 operators Huaweis low-cost operations and low-priced products have given it competitive advantage over its competitors in the international markets Huawei reported over 100% growth in its UMTS and GSM transceiver (TRX) shipments in H108 compared to H107. In the GSM sector, the company delivered 800,000 TRXs, more than the total number of shipments for the whole of 2007, in H108, with China and India combined taking up 400,000 units Although Huawei claims to have made significant breakthroughs in the Japan and US markets, the company has still yet to make any real headway in these areas; its US subsidiary, FutureWei, has won very few contracts in the North American market As of Q108, Huawei claimed almost 8% of the worlds cellular infrastructure market. It is gaining ground on Alcatel-Lucent, the number three vendor with a 13% market share. Ericsson and Nokia Siemens Networks lead the market with 29% and 23% shares of the market, respectively. Huawei believes the sale of a stake in its mobile devices business to a US equity firm will help it access the US market. The sale will also provide Huawei with funds to compete against larger network equipment makers Ericsson and Alcatel-Lucent Huawei believes the mergers that created Alcatel-Lucent and Nokia Siemens Networks are creating opportunities for the company because mobile operators are seeking to diversify their supply base Chinese telecoms equipment manufacturers are sure to win a substantial portion of the contracts to be awarded following the restructuring of Chinas network operators The consolidation and strategic partnerships between global equipment vendors, such as Nokia/Siemens, Alcatel/Lucent, and Ericsson/Marconi, has resulted in stronger competitors with which Huawei has to compete against for business Although Huawei continues to invest huge amounts in R&D, it faces ongoing challenges in terms of developing products across a fast-growing portfolio
! !
Weaknesses
Opportunities
Threats
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BMI Huawei Technologies 2008

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HUAWEI TECHNOLOGIES

Huawei Technologies Report 2008

Part of BMI's Industry Report & Forecasts Series

Huawei Technologies Report 2008

Corporate Structure .........................................................................................................................................5

Company Activity ...........................................................................................................................................20

Business Monitor International Ltd

Huawei Technologies Report 2008

Business Monitor International Ltd

Huawei Technologies Report 2008

Business Monitor International Ltd

Huawei Technologies Report 2008

Business Monitor International Ltd

Huawei Technologies Report 2008

Business Monitor International Ltd

Huawei Technologies Report 2008

Table: Huawei Technologies Product Summary (continued)

Access Optical Distribution Network (ODN)

DSLAM MSAN Network Management

Ethernet Switches Network Management Resource Policy Control System

Business Monitor International Ltd

Huawei Technologies Report 2008

Table: Huawei Technologies Product Summary (continued)

Technology/Product Distribution & Auxiliary DF (Distribution Frame) RF (Radio Frequency)

Source: Huawei Technologies

Alliances And Agreements

Business Monitor International Ltd

Huawei Technologies Report 2008

Huawei Technologies Alliances And Agreements, 2007-2008

Product 2007 RadiSys

Business Monitor International Ltd

Huawei Technologies Report 2008

Business Monitor International Ltd

Huawei Technologies Report 2008

Business Monitor International Ltd

Huawei Technologies Report 2008

Research & Development

Business Monitor International Ltd

Huawei Technologies Report 2008

2003 2,694 na 384 389 na na

2004 3,827 697 624 480 na 4,749

2005 5,982 851 681 na na 5,754

% chg 56.3 22.1 9.1 na na 21.1

2006 8,504 621 512 na na 7,496

% chg 42.2 -27.0 -24.8 na na 30.3

2007 12,560 867 674 na na 10,590

% chg 47.7 39.6 31.6 na na 41.3

Revenue/Employee (US$000) PTOP/Employee (US$000)

Business Monitor International Ltd

Huawei Technologies Report 2008

Revenues Operating Income

Year ended December 31 China International Total

2003 2.78 1.10 3.83

% total 72.6 28.7 100.0

2004 3.30 2.28 5.58

% total 59.1 40.9 100.0

2005 3.40 4.80 8.20

% total 41.5 58.5 100.0

2006 3.85 7.15 11.00

% total 35.0 65.0 100.0

2007 4.50 11.50 16.00

% total 28.1 71.9 100.0

Source: Huawei Technologies