Huawei History

Early years

Huawei was founded by Ren Zhengfei in 1987, with an initial registered capital of RMB21,000.[17] Established in Shenzhen, Huawei started off as a sales agent for a Hong Kong company producing private branch exchange (PBX) switches. By 1990, Huawei began its own independent research and commercialization of PBX technologies targeting hotels and small enterprises.[18] After accumulating knowledge and resources on the PBX business, Huawei achieved its first breakthrough into the mainstream telecommunications market in 1992, when it launched its C&C08 digital telephone switch, which had the largest switching capacity in China at the time. By initially deploying in small cities and rural areas, the company gradually gained market share and made its way into the mainstream marke

International expansion

In 1997, Huawei won its first overseas contract,[20] providing fixed-line network products to Hong Kong company Hutchison Whampoa.[19] Later that year, Huawei launched its wireless GSM-based products and eventually expanded to offer CDMA and UMTS. In 1999, the company opened a research and development (R&D) center in Bangalore, India to develop a wide range of telecom software.[18] From 1998 to 2003, Huawei contracted with IBM for management consulting, and underwent significant transformation of its management and product development structure. After 2000, Huawei increased its speed of expansion into overseas markets, having achieved international sales of more than US$100 million by 2000[20] and establishing an R&D center in Stockholm, Sweden. In 2001, Huawei established four R&D centers in the United States, divested non-core subsidiary Avansys to Emerson for US$750 million and joined the International Telecommunications Union (ITU). By 2002, Huawei’s international market sales had reached US$552 million.[18]

In 2004 Huawei continued its overseas expansion with a contract to build a third-generation network for Telfort, the Dutch mobile operator.[18] This contract, valued at more than $US25 million, was the first such contract for the company in Europe.[21]

In 2005, Huawei’s international contract orders exceeded its domestic sales for the first time. Huawei signed a Global Framework Agreement with Vodafone. This agreement marked the first time a telecommunications equipment supplier from China had received Approved Supplier status from Vodafone Global Supply Chain. The agreement established the terms and conditions for the supply of Huawei's solutions to any one of the Vodafone operating companies worldwide.[22] Huawei also signed a contract with British Telecom (BT) for the deployment of its multi-service access network (MSAN) and Transmission equipment for BT's 21st Century Network (21CN), providing BT and the UK telecommunications industry with some infrastructure necessary to support future growth as these companies are multi vendor infrastructure.[23]

In May 2008, Huawei and Optus developed a mobile innovation centre in Sydney, Australia, providing facilities for engineers to develop new wireless and mobile broadband concepts into "ready for market" products.[24] In 2008, the company embarked on its first large-scale commercial deployment of UMTS/ HSPA in North America providing TELUS's new next generation wireless network and Bell Canada with high-speed mobile access.[25]

Huawei delivered one of the world’s first LTE/EPC commercial networks for TeliaSonera in Oslo, Norway in 2009. The company launched the world's first end-to-end 100G solution from routers to transmission system that same year, to help meet the rapid growth of network traffic and enhance router efficiency and reliability.[18]

In July 2010, Huawei was included in the Global Fortune 500 2010 list published by the U.S. magazine Fortune for the first time, on the strength of annual sales of US$21.8 billion and net profit of US$2.67 billion.[26] In late 2010 it was reported that Huawei is planning to invest around US$500 million (Rs 2,200 crore) to set up a telecom equipment manufacturing facility in Tamil Nadu, India and $US100 million to expand its R&D center in Bangalore.[27][28]

In October 2012, it was announced that Huawei would move its UK headquarters to Green Park, Reading, Berkshire.[29] The company also, in an effort to increase its prominence in the United States, became the main sponsor of the Jonas Brothers' 2013 summer tour.[30]

In September 2013, Huawei opened a new Canadian office in Regina, Saskatchewan—Huawei had collaborated with the local carrier SaskTel to build its HSPA+ and LTE networks. The company also announced that SaskTel would carry its new Ascend Y300 smartphone.[31]

In October 2013, Huawei has been selected by TDC A/S as a sole vendor to modernize the nationwide GSM/UMTS/LTE network in Denmark and provide managed services over a six year period. The value of the contract is over $700 million over the term of the agreement.[32]

Investment and partnerships

Huawei has focused on expanding its mobile technology and networking solutions through a number of partnerships. In March 2003, Huawei and 3Com Corporation formed a joint venture company, 3Com-Huawei (H3C), which focused on the R&D, production and sales of data networking products. The company later divested a 49% stake in H3C for US$880 million in 2006. In 2005, Huawei began a joint venture with Siemens, called TD Tech, for developing 3G/ TD-SCDMA mobile communication technology products. The US$100 million investment gave the company a 49% stake in the venture, while Siemens held a 51% stake.[18] In 2007, after Nokia and Siemens co-founded Nokia Siemens Networks, Siemens transferred all shares it held in TD Tech to Nokia Siemens Networks. At present, Nokia Siemens Networks and Huawei hold 51% and 49% shares of TD Tech respectively.[33]

In 2006, Huawei established a Shanghai-based joint R&D center with Motorola to develop UMTS technologies.[18] Later that year, Huawei also established a joint venture with Telecom Venezuela, called Industria Electronica Orinoquia, for research and development and sale of telecommunications terminals. Telecom Venezuela holds a 65% stake while Huawei holds the remaining 35% stake.[34]

Huawei and American security firm Symantec announced in May 2007 the formation of a joint-venture company to develop security and storage solutions to market to telecommunications carriers. Huawei initially owned 51% of the new company, named Huawei Symantec Inc. while Symantec owned the rest. The joint-venture was based in Chengdu.[35] In March, 2012, Symantec announced the sale its portion of the joint venture to Huawei.[36]

Grameenphone Ltd. and Huawei won the Green Mobile Award at the GSMA Mobile Awards 2009.[37] In March 2009, the Wimax Forum announced four new members to its Board of Directors including Thomas Lee, the Vice Director of the Industry Standards Department at Huawei.[38]

In 2008, Huawei launched a joint venture with UK-based marine engineering company, Global Marine Systems, to deliver undersea network equipment and related services.[39]

Recent performance

In April 2011, Huawei announced an earnings increase of 30% in 2010, driven by significant growth in overseas markets, with net profit rising to RMB23.76 billion (US$3.64 billion; £2.23 billion) from RMB18.27 billion in 2009.[40] In 2010 sales outside China continued to be the main driver of Huawei’s business. Overseas revenue rose 34% to RMB120.41 billion in 2010 from RMB90.02 billion in 2009, fueled by regions including North America and Russia. Revenues from China rose 9.7% to RMB64.77 billion, as the country's big telecom operators reduced their investment last year.[41]

Huawei's revenues in 2010 accounted for 15.7% of the $78.56 billion global carrier-network-infrastructure market, putting the company second behind the 19.6% share of Telefon AB L.M. Ericsson, according to market-research firm Gartner.[41]

Huawei is targeting a revenue of $150 million through its enterprise business solutions in India in next 12 months. It denied using Chinese subsidies to gain global market share after being recently accused by US lawmakers and EU officials of unfair competition.best[