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Case Huawei TelcoCase Huawei Telco
The internationalization of Huawei’s B2B business unit The Profile of Huawei and Its Growth in the International Market Huawei Technologies P/L was founded in 1988. It is a high technology private company that provides customized network solutions(定制的网络解决方案for telecom carriers(电信运营商around the world, specializing in the research and technology development. It invests at least 10% of annual sale volume in new product research and development. Huaweis contracted sales in 2005 reached USD 8.2 billion, of which 58% came from international markets. Overseas sales have been doubling each year for the past five consecutive(连续的years. At the end of 2006, Huawei has over 61,000 employees, of whom 48% are dedicated to RD. Huawei has provided products and service for over 300 telecom carriers around the world. It has achieved outstanding growth over 17 years since its foundation. Huawei has won the leading position in the global market in the areas of 3G, next generation network (NGN), switching, xDSL, optical network, and data communications. Table 3 shows the market position of Huawei in the global market. Table 3 The position of Huawei in the global market Source: (Dittberner 2005; Gartner 2003; Huawei 2003, 2005b, 2005a) The first step of internationalization in Huawei is providing customized design of ‘number portability service(号码可携服务)’ for Hutchison Telecoms, Hong Kong in 1996. Huawei spent only 3 months on helping Hutchison to realize the service instead of quotation of at least 6 months set by European telecommunication manufacturers(电信制造商). Furthermore, the price is only half of that from the other competitors (Li, C. Cui 2004) After that, Huawei made a decision to enter international market. Russia and Southern America market are first selected. Huawei entered Russian market in 1996. It set up a joint venture of Beto-Huawei with Russian Beto Konzern and Russia Telecom to develop Russian market in 1997. However, Huawei did not get any order within four years.
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