Huawei reports bullish profits up 30% in 2010

Privately held Huawei Technologies Co. Ltd., a giant in the Chinese telecommunications equipment world, released an audited annual report today that highlights a welcome spike in profits and provides more insight into the workings of the company with details of a business plan and information on the board of directors.
Huawei reported a 30% increase of net profits in 2010 to $3.64 billion U.S. (23.8 billion yuan), a rise from the 2009 total of $2.8 billion (18.3 billion yuan).
The company credits global expansion in U.S. and European markets with overseas sales and growth in Huawei’s telecommunications networks, services and devices. Telecom is the company’s core strength, even in a market filled with stiff competition from Chinese rival ZTE Corp., Nokia Siemens Networks (NSN), and Ericsson.
Huawei is also expanding from a telecom equipment manufacturer to an IT services provider and is investing in its mobile phone business. An increase in market share is evident, as both Huawei and ZTE show top-line sales growth in the double digits, as opposed to European competitors.
By the end of 2010, Huawei had deployed over 80 SingleRAN networks for operators, among which 28 LTE networks were commercially launched or ready to be launched. Huawei also shipped 120 million devices around the world.
In an unprecedented move by Huawei, the report shed light on the company’s board of directors complete with names, biographies and pictures. The company said the current board was voted in at the beginning of 2011.
Huawei’s global expansion has had some troubles due to allegations that the company is tied to the Chinese military and likely released the new information on the board to provide more transparency. Huawei recently backed down from a deal to buy 3Leaf Technologies for $2 million after the U.S. government challenged the proposal due to national security worries concerning the purchase of the American server technology company.
No board members are listed as ex-military, with the exception of founder Ren Zhengfei, a former military engineering corps specialist.
Huawei’s new growth strategy to glean opportunities from the industry’s digital transformation includes the creation of four key business groups in the form of carrier networks, enterprise, devices, and other businesses. A new management and corporate governance structure is also part of the business plan.
“Operators continue to choose Huawei for our unique ability to transform their needs into customized, innovative, and flexible solutions that create maximum value for their business,” said Ken Hu, deputy chairman of Huawei Technologies. “As part of Huawei’s future growth strategy, we leveraged our deep experience in the telecoms industry to expand into new areas, including the enterprise and device businesses, and will continue to capitalize on opportunities provided by the industry’s digital transformation to support our global business in 2011.”
The company launched its enterprise business in 2010 and intends to dedicate resources to further develop this offering, which provides network infrastructure, fixed and wireless communication, data center, and cloud computing solutions for global industry and enterprise customers.