14 July 2006
Dubai: Huawei Technologies, China's biggest telecoms equipment maker, is open to research collaborations to broaden its product portfolio and is hunting for alliances to break into North America's insular equipment market.
But its status as a private company restricts its ability to chase large acquisitions and clouds its prospects in an industry that has seen several high-profile mergers aimed at developing new converging technologies.
Fu Jun, a spokesman for Huawei Technologies Co, Ltd, told reporters on a visit to the company's plant in Shenzhen, China, that Huawei carries out joint research with leading IT companies such as IBM, Microsoft and Intel even though much of its technology is home grown.
"Huawei is open to cooperation and partnerships with other vendors but being a private company it is a little difficult for us to go for a big acquisition. We may consider going public some day, but we don't have a time-table for it right now," Jun said.
Global telecom companies are now increasingly merging their businesses to meet the needs of phone operators who increasingly wish to use converging technologies to offer a range of services using a single network.
In June, Finnish company Nokia, which has strengths in mobile phone exchanges, and German company Siemens, considered strong in fixed-line telecoms, pooled their network equipment businesses in a joint venture. Their aim is to develop integrated telecoms products that can simultaneously serve fixed-line, broadband, internet, wireless and television services.
In October, Sweden's Ericsson bought parts of Britain's Marconi and in April, Alcatel of France said it would buy America's Lucent Technologies.
But Huawei says it had seen the merger trend early and is not worried.
Jun said three years ago everybody used to ask them how they could support such a broad product portfolio but now the industry is doing exactly the same.
Huawei, set up 18 years ago and owned by its employees, offers a broad product portfolio including the setting up wireless, fixed-line, optical and data networks, applications and software for value-added services and handsets and wireless terminals.
But, despite Huawei's broad product portfolio it also has joint ventures with rivals Siemens and 3Com and signed another JV agreement with Canada's Nortel in February. That relationship ended in June but the two are still exploring ideas for joint research.
Jun said Huawei receives mergers and acquisition proposals from several analysts who watch industry trends, especially from the US, but is not interested in them. It is keen on partnerships though.
"For example, we hope we can cooperate with some North American vendors to enter the North American market because the vendors there have very close ties with their phone operators."
Huawei's telecoms equipment have already been sold in more than a 100 countries including the US, UK, France, Russia and Brazil and serve 28 of the world's top 50 operators.
Helped by booming demand for telecoms services, it expects its global contract sales to jump 22 to 34 per cent in 2006 to $10-11 billion from $8.2 billion last year.
By Arif Sharif
Gulf News 2006. All rights reserved.
