Huawei Unveils India Strategy

by Sonal Desai    Aug 12, 2009

Huawei is scaling its presence in India with robust research and development, increasing investments in sales and operations, and local leadership; encouraging it to predict sales orders worth $2.6 billion by end 2009, a cent per cent rise over last year

A. Sethu Raman, executive director (product and solution system) at Huawei, in an interaction with CXOtoday said, Technology wise, we have innovated. We are ready.

Although, Huawei has been in existence since the last 21 years, it came to India ten years ago. And the first thing we did was set up a R&D division. So far, we have invested $200 million, and even today, Huawei returns 10 per cent of its revenues toward R&D. Till date, the company has 37,000 patents.

On the talent front, Huawei only recently started localizing its senior management. The expatriats are slowly being replaced by executives from India. The company has 2000 people in R&D in India of which 98 percent are Indians, and there are another 2000 more for sales and operations of which more than 70 percent are Indians.

Due to its large number of Indian workforce, Huawei, the provider of next generation telecommunication products, and end-to-end solutions and services has projected a CAGR of 100 percent over last year. With India the global projections have also increased from $23.3 billion in 2008 to $30 billion end 2009. Globally, it has maintained a CAGR of 48 per cent for the last five years. Huawei s financial year is from January to December.

Huawei is willing to disclose how it helps the CXO calculate total cost of ownership (TCO). Raman said:

*  There is a certain amount of Capex (about 20-25 percent) and certain amount of Opex (about 80-75 percent). The equipment is the Capex.

*   Beside the lower price point, Huawei s equipments feature a lot of innovation. As a result these equipments have a smaller foot-print, are lighter in weight (therefore lesser real estate), and consume less power (uses natural cooling). All these features prevent Huawei s equipments from failing, thereby bringing the TCO down by 30 percent to 50 percent.

*   So for a CTO, it means ease of use, manageability (same set of people are able to manage 2G, 3G and LTE)

*   A CIO can offer new applications through the platforms, operations, offer new services on the fly and increase services

*   For a CFO this means lower Opex and Capex

*   And the unit can convince the CEO that this is the right choice.

He said, Our overall process is good. We manage our inventory well. Manufacturing is not an issue. Everybody does it in China.

Huawei has referral case studies on how it manages Haj pilgrims, the Olympics, and also the infrastructure backbone of BSNL. Some of Huawei other customers include RCOM, Aircel, Airtel. Globally, 32 of 50 large telecoms are Huawei s customers.

In India, Huawei is also focused on the needs of the rural people and is offering solutions on energy management with its small configuration base stations, alternate sources of electricity in addition to more practical works such as agriculture.