Feb 11, 2015 03:09 PM

China's Huawei Says Its Ready for Transparency


Ren Zhengfei

(Beijing) – The global market for telecom operator equipment, network gear and smartphones is evolving as major manufacturers spin off loss-making divisions and strengthen profitable ventures.

Chinese electronics giant Huawei Technologies, which is expected to post record sales and profits for 2014, is riding this global wave but in a unique way: The company and its controversial CEO Ren Zhengfei recently decided to lift a veil of mystery that for years obscured Huawei's image and intentions, puzzling market observers, investors and potential clients.

The company's new strategy focuses on more transparency and is aimed at counteracting a negative image that emerged from a 2012 investigation by a U.S. congressional committee into Huawei's alleged links to the Chinese military. The probe raised American national security concerns and prompted a U.S. government ban on any investment and acquisition made by Huawei.

Ren, 70, helped spark the new initiative in January by speaking with the media for only the fifth time since he founded Huawei in 1987. He stepped into the limelight at the World Economic Forum in Davos, Switzerland, where he answered questions from Chinese and non-Chinese reporters about the growth of his business, Internet security and the company's image.

Driving this new openness is Huawei's determination to break into the U.S. market, where the company annually sells about US$ 2 billion worth of mainly smartphone devices. The company has been knocking on America's door by setting up subsidiaries and forming partnerships with research institutes and telecom operators in neighboring Canada.

Huawei does business in 170 countries and regions worldwide, and overseas businesses accounted for about 70 percent of last year's sales. The company is projecting 2014 earnings of US$ 5.4 billion on revenues of US$ 46 billion, up 20 percent from the previous year. About 38 of the world's 50 largest telecom operators buy Huawei products. The company is also a growing smartphone maker.

But Huawei wants a bigger piece of the global market pie. To that end, Ren said he's still keen to break into the U.S. market, and hopes his company's bow to transparency will help open doors.

Although Huawei has found the European market friendlier and more accessible, Ren said he "never thought we were treated unfairly in the U.S." In fact, he says his company "should learn" from the American business culture's "openness."

American companies "in the past had an absolute advantage in electronics and information technology," he said. And they "will still have an edge, relatively, for several decades to come."

At Davos, Ren told reporters at a press conference and during an interview with the British broadcaster BBC that he hopes the transparency campaign helps counteract doubts about his company that have affected its business prospects in some countries. He said he wants critics to "stop hunting down Huawei" because "Huawei is also in a tough position."

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