huawei logo.jpgPositively our last word on Telecom World and, unsurprisingly, that word is Huawei.

When the event was last held in 2003, China's leading telecoms
equipment manufacturer was just emerging as a potential competitor in
Europe and it was absent from the North American market. But what a
difference three years make.

At this year's Telecom World, conveniently held on Huawei's doorstep
in Hong Kong, the Shenzhen-based company attracted the sort of media
buzz once reserved for the top table of western equipment suppliers.

A sign of how times have changed came when Cisco's CEO John Chambers
gave a press conference. The burning question was not about Cisco's
product strategy or Chambers' vision of the Internet, but whether the
US giant planned to partner with Huawei. His reply was equally
revealing.

“I would love to partner with Huawei,” Chambers told reporters. “That may or may not happen in the future.”

Huawei has just ended a joint venture with 3Com of the US, so its unlikely to be in a hurry to tie the knot again — see this EngagingChina story for more.

However, Chambers' response that his door is open reveals the
new-found respect enjoyed by Huawei,which has shaken off its
traditional image as a vendor that focussed primarily on the Chinese
market and a handful of emerging countries.

Indeed, Huawei announced
at the event that in the first half of 2006 it had recorded contract
sales of $5.2bn, an increase of 29% compared to the same period last
year. The value of contract sales from international markets grew even
faster, up 36% to $3.4bn.

International business now accounts for almost two thirds of
Huawei's sales — just the sort of juicy statistic worth remembering
for dinner party debates when someone argues that China's hi-tech
companies cannot make it overseas.

Huawei reiterated its recent customer wins with leading European
operators such as Telefonica, Vodafone and BT. In the wireless space,
Huawei has secured 35 contracts to deploy 3G networks.

The company also talked up its R&D strengths, with more than
2,500 patents granted to date. It wants to increase R&D investment
to expand its patent portfolio.

This issue of intellectual property rights looks set to become the
new battleground for Huawei. While it is best know internationally for
its capital equipment, it also supplies mobile handsets to more than 70
operators around the world.

However, it is at a big disadvantage in the handset business because
it only owns around 5% of the IPRs for the components used in its
handsets — foreign firms such as Qualcomm of the US have the lion's
share.

According to this
IDG story, Huawei could benefit from China's new TD-SCDMA standard for
3G networks, as the patents for this home-grown technology are owned by
Chinese companies. More on the TD-SCDMA saga in this earlier EngagingChina story.

Of course, with so much expectation now riding on Huawei, hubris
dictates that something sooner or later is going to go wrong. But at
this point its difficult to see what.

More on Telecom World in this EngagingChina story.


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