#2 Huawei: Incomparable

Despite the challenging security issues imposed by the government on Chinese
telecom network equipment vendors, Huawei's revenue rose to Rs 11,000 crore in
fiscal 2009-10 from Rs 6,240 crore during 2008-10.

The factors that contributed to the 76% growth include its main achievements
such as the GSM order for Reliance Communications, significant wins from
greenfield operators like Aircel, Uninor, Videocon Telecommunications, Sistema
Shyam and S Tel. It rolled out 3G operations for BSNL in key towns and cities in
all the four states of South India. For BSNL, it rolled out the WiMax project
for BSNL in Rajasthan.

Besides wireless and phones, Huawei showed impressive growth in fixed
broadband, WiMax, transmission, software and datacards businesses. Its manpower
grew to 3500 from 1800, showing around 100% growth.

The Chinese vendors' global revenue growth for the full-year 2009 is in line
with its India growth. Huawei's global sales revenue touched $21.8 bn, a 19%
growth over the previous year. Indian operators postponed a part of their
capital investment in 2G expansion in the wake of lack of clarity on delay in 3G
auctions. Huawei was able to record a strong performance in FY 2009-10, thanks
to its customer-centric innovation strategy. The customer lead strategies
enabled delivery of sophisticated, high-quality and scalable network solutions
that better meet the business challenges of operators.

Huawei's 'Single-RAN' wireless solution, which integrates multiple network
systems into one single platform, has been embraced by thirty operators
globally. It is better positioned to meet Indian operators' requirements too. It
is looking forward for 3G and LTE in India. Its Single-RAN products are ideally
suited for the Indian market. It would help operators to reduce capex when they
want to rollout 3G/4G.

Cost factor is a thing of past for service providers. Huawei is currently
positioning its offerings as value for money. This is beyond its cost-effective
products approach adopted during the first phase of establishing its presence.
Besides RoI, its value proposition involves time to market strategies and of
rapidly delivering robust solutions that address the business challenges of its
customers through innovation. Its green telecom initiatives are helping in
gaining market share too. Globally, Huawei works with forty-five of the world's
top fifty operators, up from thirty-six in 2008. By the end of 2009, there were
over 3,000 BTSs operated globally with power supplies coming from alternative
energies. Huawei helped Telenor in building a green network in Bangladesh, which
successfully reduced CO2 emissions by more than 700 tonnes per year. Huawei
wants to repeat the Bangladesh success in India as well.

Customer is king for Huawei. Huawei is moving towards a decentralized
structure that empowers employees with greater flexibility to better respond to
customer requirements. Huawei, which is also facing security issues along with
the other Chinese player-ZTE-will face tough market in the 3G space. In the 3G
market, Huawei is still trying to establish itself. BSNL has selected Dilithium
solutions for deploying new mobile video and streaming services over 2G and 3G
networks. BSNL South Zone will deploy 3G live TV and other video services.
Dilithium has partnered with Huawei Technologies in the BSNL South Zone to
provide delivery solutions for BSNL's live mobile video services. However, its
device focus is losing steam. It wants to focus on the operator resale market to
help customers meet the diversified device requirements of users by providing a
wide variety of network terminals.

3G and BWA auctions will change the whole industry's dynamics

What are your main strategies to gain market share in India? Despite the challenging macro-economic environment, Huawei recorded a strong performance in India because of its customer-centric innovation strategy, which enables delivery of sophisticated high-quality and scalable network solutions that better meet the business challenges of operators. What are some of the main changes we would be seeing in the industry in the new 3G-4G era? With the 3G and BWA auctions, the whole industry dynamics is likely to change. While on the one side rising spectrum prices will lead to rise in investments, changes for the user will include access to more applications (web 2.0, video 2.0), more video on handsets, cloud-based applications, more user-friendly and richer applications. This scenario will also lead to changing business models, which would include more software-based applications and social networking sites. Operators would also look at leveraging their central position in this scenario-with more service models and collaborations, directed ads, precision advertising, M2M applications and location-based services. This growth in ad-revenue would lead to alternate sources of revenue for the operator. Some of the other changes in dynamics would be change in networks-convergence of IP and all-IP infrastructure, end-to-end flat IP infrastructure (for all networks, including 3G and WiMax). MAX YANG CEO, Huawei Technologies What are some of the complexities that operators will face, and as a vendor, what will be your role in reducing their burden? Some of the emerging complexities for operators would be in regard to RoI, time to market, fitting into the new ecosystem, maturity of technology coupled with right price points, future proof of their investments and issues related to new technology such as risks, shelf-life and scalability. To combat the above we are addressing three areas-ARPU, bandwidth and cost. Moving from voice to data has led to falling ARPUs and increasing bandwidth requirements as well as rising costs-both in terms of deployment of new technology as well as costs involved in running them. This has led to a scenario wherein costs are exceeding revenues. Thus, through our new solutions, we help reduce additional space, energy consumption, cost, and carbon footprint as well. Keeping in mind the latest allegations of a security breach, what new proven security systems are you offering? Security is very important and each country has its own forms of protectionist mechanisms to ensure security. However, all our equipments comply by ITU standards and address all security issues. The whole issue has been blown out of proportion and we are confident of getting a security clearance. We work with most of the top operators in the world. We never faced any security issues. We are ready to meet government norms. Have you pulled out of the ITI bid? No decision has been taken yet. Highlights Pocketed the RCOM order for its GSM expansion Bagged orders from greenfield operators, including Aircel, Uninior, Systema Shyam, STel and Videocon Technologies Rolled out WiMax project for BSNL in Rajasthan Established the NNOC center in Gurgaon for its clients under the Managed Services model Rolled out 3G operations for BSNL in key towns and cities in south India What are your latest plans on manufacturing in India? We are currently looking at locations for setting up a manufacturing unit in India. Is 2000-10 exciting for the telecom industry? We see our business momentum continuing in 2010 and expect y-o-y revenue growth primarily driven by increased deployments of mobile and broadband networks, further take-up of customized smart devices, and higher demand for professional managed services.