Huawei confident of Middle East growth despite US pressure

Huawei, the world's largest telecoms equipment maker, is bullish on its 5G business within the Middle East  despite mounting pressure from the US to exclude the company from lucrative 5G business deals.

“The US is sparing no effort in smearing Huawei… it is trying to influence customers’ choice around the world, including in the Middle East,” said Charles Yang, Huawei’s Middle East president, at an event in Muscat on Wednesday.

He said the company was confident it would continue to witness growth in its regional 5G business despite “malicious campaigns”.

“Huawei is present in the Middle East for more than 20 years now and our customers trust us. They recognise our values and contribution to their economies and will not be influenced by any external force,” added Mr Yang, without disclosing Huawei's regional profit or revenue.

The China-based firm is a key player in providing 5G services but the US government alleges that it is using its equipment to spy for the Chinese government - a claim that Huawei denies.

By the end of last year, Huawei said it had managed to secure 77 5G contracts globally, of which 12 are in the Middle East. Nearly half of its contracts are in Europe, where it faces tough competition from local companies such as Nokia (63 contracts) and Ericsson (81 contracts).

Its battle with the US administration impacted Huawei’s global earnings though.

The embattled company saw its annual revenue rise 18 per cent to more than $122 billion (Dh447.7bn) in 2019, which was lower than its earlier projections. The tech giant reported revenue grew by almost 19.5 per cent in 2018.

“The US is leveraging all available resources to attack a private company like us… it is unprecedented. This is a pure political prosecution. But all these attacks are making us strong and motivating us to bounce back strongly,” said Mr Yang.

Huawei’s biggest markets in the Middle East are Saudi Arabia and the UAE – the Arab world’s largest economies – and its first priority is to “manage its regional business to ensure growth” rather than focusing on the US, the executive said.

“We will keep investing in the region to make sure that we are offering the most advanced technologies and complying with the best cybersecurity requirements,” said Mr Yang.

Huawei also signed an agreement with Oman Telecommunications Regulatory Authority on Wednesday to collaborate on developing local talent in the telecommunications sector.

“Telcos in Oman are investing in 5G but they are not clear about the exact values… we will work with them to achieve the desired outcomes and develop the right use cases over the coming months,” said Mr Yang.

A 5G network promises an internet speed of up to 1.2 gigabits per second, which will gradually reach 10Gbps — more than 100 times faster than 4G. A 5G network has a latency of less than one millisecond, compared to 20 milliseconds for a 4G network.

Huawei has been locked in a dispute with the White House for months.

Last week, US prosecutors accused Huawei of stealing trade secrets and helping Iran track protesters in its latest indictment against the Chinese company.

Mr Yang said that the indictment by the US Department of Justice is a “politically motivated execution on Huawei”.

“No company can achieve global leadership through stealing others’ technology. We really look forward to have a US company competing with us in the 5G race. We are open for fair competition and collaboration.”

Mr Yang said that the Huawei ban could backfire on the US as counter-measures could cost the world's biggest economy.

The supply ban will prompt Huawei and Chinese government to accelerate their technology investment to “reduce reliance on foreign suppliers”, S&P Global Ratings said in a June 2019 note. This could eventually “lower” the long-term growth prospects of US technology firms, the ratings agency added.

Shenzhen-headquartered Huawei is one of the world’s largest investors in research and development. The company invested $15bn in R&D in 2018 and has plans to invest an additional $100bn over the next five years.