The Facts on Huawei
My first day at Huawei was twenty two years ago – it was a very different company back then and a very different China too.
Huawei was a very small private company and we could not win any business with telcos in China’s big cities because they were using technology from American companies like Motorola or European companies like Alcatel, Nokia and Ericsson.
It’s hard for me not to laugh when I hear people claim that Huawei is a creation of the Chinese government when we actually had to scrap for survival in our own country whilst American and European companies were making big profits from our own state-owned telcos.
So, to clear this up once and for all, Huawei is not and has never been owned by the Chinese government, we are owned by our employees with around 100,000 employees owning shares including myself and many others here in Australia.
In those early days the only way in which Huawei could do business was to go into rural areas in China, the parts of the country where the Americans and Europeans were refusing to go, and sell our products there.
It was an extremely tough task in those days, very often we would be travelling to places where winter temperatures were minus thirty degrees and the days were very long and hard.
Even though it was tough the rewards were great, by taking our technology to these places we were enabling farmers and people in rural China to make telephone calls for the very first time – that was inspiring to us.
Those early days shaped our company in so many ways.
Firstly, those rural areas have unique requirements, we could not sell them the same equipment used in the cities, we had to develop products that would suit them – that’s really how we became so customer-centric in how we operate.
Secondly, those hardscrabble days imbued in us an ability to do whatever it took to survive, if it meant driving for ten hours across a frozen landscape to reach our customer then we would just get on and do it, there was no other choice.
I am going to tell you something that may surprise you, but it’s absolutely true: Huawei really only became a global company because of the United States, that’s despite the fact that we have never signed a deal with a major US operator.
Let me explain why.
Back in 2001 China was deciding on which type of 3G technology to use of the three available, one was from Europe (WCDMA), one was from the US (CDMA) and the third was a home-grown Chinese technology (TD-SCDMA).
At the time China was looking to join the World Trade Organization so a decision was made to use all three technologies in China, thereby allowing both European and American technology into the Chinese market – each of China’s three state-owned operators was directed to use a different technology.
That was great news for US companies like Qualcomm, a major backer of CDMA, and also great news for European vendors who could sell their WCDMA technology in China – but it was very bad news for Huawei.
At that time we were solely focused on WCDMA technology so we suddenly found ourselves in big trouble because we could now serve only one of the three Chinese operators, that being China Unicom – the smallest of the operators.
Faced with being cut out of most of our own home market Huawei had to expand overseas, firstly to Europe and the Middle East to try to win new business – and we managed to do that very successfully but it may not have happened if we had not been forced to do it by what was happening in our own market.
Now, a lot of people claim that we only had that success because operators only buy our equipment because it is much cheaper than our rivals – again this is just not true.
Our customers in 170 countries around the world don’t buy our equipment because it’s cheaper for them to buy from us, sometimes our equipment is actually more expensive than our rivals, they buy from us because our technology delivers things that other companies cannot.
I will give you an example of what I mean by that.
We can make our radio antennae extremely light, often less than 15Kgs, which means that a single engineer can install it on tower rather than needing a team of engineers to do the job – when an operator is building 100,000 cell-towers that makes a huge difference economically.
In addition, the $15 billion we spend on R&D every year allows us to develop highly advanced technologies that help the operators extract the best possible performance from their networks, to put it simply, we help them cover more of the country and cover it with a lot more capacity.
Up until the 5G ban here in Australia and then the US actions against Huawei not many people knew our company, now we are one of the most famous companies in the world.
We wish we could return to simpler times when we were not always in the headlines but that may not happen for a while but all we ask of people is that as the debate around Huawei continues that it is based on facts, hopefully that is not too much to ask.
Hudson Liu is CEO of Huawei Australia.