Less than two decade years after the liberalisation and wholesome privatisation of the African telecommunications markets, Huawei have established itself as important equipment suppliers across the African telecoms market. So far, their presence in the market is growing, and presently upgrading its service offering to include networks as they have done in other African.
Huawei arrived to Nigeria in 1999 in the midst of the democratisation after years of military rule and by 2004 was bringing revenues of USD $400 million. It has since replaced traditional equipment suppliers like Alcatel and Siemens in the Nigerian market, thanks to their aggressive commercial approach and low prices.
Their Code Division Multiple Access (CDMA) 450 MHz equipment is apt for long signal range in rural areas. Based on the principle of “invest in Africa, serve Africa”, Huawei has made significant efforts towards the development of the continent ever since it entered the African market. Huawei not only has been dedicated to providing high quality and tailor-made solutions and products to its partners, it has also continuously strived to improve its service system and quality so as to better serve its customers. Moreover, Huawei actively participates in the cooperation with local partners and makes efforts to foster local telecommunication talents, in order to facilitate the development of African telecommunication industry.
In the consumer product segment, Huawei has ensured that its presence is felt across the market. The Chinese handset manufacturer is in fierce competition with Samsung and has reportedly eaten much of its share mainly owing to reasonable rates and quality phones in different price ranges. To many, Huawei has created its own market and it has fully taken advantage of soaring demand for smartphones in post 3G-4G era.
Huawei is capable of providing end-to-end solutions to telecommunications carriers, and they have built broad product portfolios. Based in China’s Shenzhen region, one of the country’s special economic zones’ that provide tax incentives for companies. It has successfully completed against domestic multinational players in China’s domestic market and are now expanding internationally by targeting underdeveloped, price sensitive markets often skipped by major western brands.
While commenting on Huawei’s market share, various handset industry experts supported the impression that a new brand requires 2 to 3 successful models for registering itself in consumer’s mind. However, Huawei has to its credit more than half a dozen successful models – back to back, in the shape of Y6, Y625, Honor 5X, G610, Honor 3C, Honor 3C Lite, Honor 4C, and P8 Lite.
Huawei products and equipment typically costs 30 to 40 per cent less than similar gear sold by western suppliers, who are reluctant to see their margins eroded by price cuts. The company is quickly gaining a reputation as world class suppliers and are up and coming players in the international marketplace.
According to reports, Huawei spent $ 9.2 billion on R&D in 2015, more than what Apple spent – $ 8.1 billion. However, Samsung invested a little less than $ 12 billion in the same period. According to various sources, Huawei has considerably improved its retail sale that stands at nearly 80,000 units per month, an almost 50% uplift from what it recorded a year earlier in the local market.
Huawei, a private company, was established in Shenzen in 1987 with registration capital of only USD $27,000. Now the company has total revenues of over USD $6 billion. Since its founding, Huawei has grown quickly and now employs 30,000 people worldwide. It is expanding internationally at an accelerated rate with 65 per cent of sales now emanating from overseas markets. Huawei’s overseas sales increased from USD $50 million in 1999 to USD $ 5 billion in 2005, a hundred fold growth within 6 years. Huawei has established over 85 overseas branches, research centers and factories, and has deployed wireless terminal technologies in over 100 countries, providing services for roughly 1 billion customers.
Beginning in 2003, Huawei cross the US$ 1.05 billion bar in terms of sales revenue from the international market and in 2004, Huawei exceeded US$ 2 billion sales revenue coming from the international market. At present, it is targeting US$ 8 billion sales revenue from the international market. Much of Huawei’s overseas success is attributed to the company penetrating rural, developing world markets. Huawei is the number one producers of CDMA 450 Mgz rural telephony and holds 67 per cent of the world market share of the technology.
Indeed, Huawei got its starts in China by targeting markets in small cities and towns in remote province, areas to which multinational companies did not even bother to seek access. The company has moved up the value-chain in its products and services provision in China and is now following the same successful formula overseas.
Away from Nigeria, Huawei Technologies has won a series of contracts which amount to over US$400 million from main-stream telecom operators from Kenya, Zimbabwe, and Central Africa. The cooperation covers a wide scope of Huawei products and solutions including 3G, NGN, optical transmission, switches, routers and Intelligent Network.
Huawei also executed a US$34 million contract to reconstruct and update SAFARICOM’s Intelligent Network for the Kenya’s biggest mobile operator. SAFARICOM chooses Huawei as its partner not only because of Huawei’s advantage to provide cost-effective products and solutions, but also due to Huawei’s sound service-provisioning and research and development capability. It is reported that a number of western leading telecom gear suppliers had been invited to compete for the bid, but finally Huawei outperformed them with a good price performance ratio.
In addition, Huawei signed one more contract with Nigeria’s second large mobile operator, Airtel. Huawei provides GSM base stations worth US$80 million to Airtel. In addition, Huawei also signed with the Ministry of Communications ‘The Agreement on Nigeria’s Introducing Next Generation Network Communications Technology’. According to the agreement, Huawei will cooperate with the Ministry of Communications in the domain of cutting-edge technology, involving fixed network, mobile communications, optical transmission and data communications.
Huawei will offer Nigeria’s telecom operators the most advanced equipments of NGN, 3G, Super-DWDM and high-end routers, and technical training, in the aim of providing better after-sales service and supporting the healthy development of Nigeria’s telecom market. To fulfill this aim, Huawei has invested US$7 million to establish a multi-product training center in the Capital of Nigeria starting back to August, 2004, and has trained over 150 professionals for Nigeria. Huawei’s commitment to help Nigeria develop its telecom industry has been highly appreciated by the Nigerian telecom operators. This time when the Nigerian President heard the progress, he was very pleased and encouraged Huawei to proceed even faster. ‘The faster, the better’ he said.
As for the contract with Airtel, Huawei, as the main provider of Airtel, will deploy GSM wireless equipment across 15 of the 36 Nigerian states, whereby Huawei is about to acquire another substantial market share of Nigeria’s telecom market in addition to the 40% market share it has gained when serving as the partner of Nigeria’s largest mobile operator MTN. This contract enables Huawei to become the most mainstream telecom gear provider in Nigeria.
According to a recent agreement, Huawei will cooperate with the Communications Ministry of Nigeria in the domain of cutting-edge technology, involving fixed network, mobile communications, optical transmission and data communications. Huawei will offer Nigeria’s telecom operators the most advanced equipments of Super-DWDM and high-end routers, and technical training, in the aim of providing better after-sales service and supporting the healthy development of Nigeria’s telecom market. To fulfill this aim, Huawei has invested US$7 million to establish a multi-product training center in the Capital of Nigeria starting back to August, 2004, and has trained over 150 professionals for Nigeria. Huawei’s commitment to help Nigeria develop its telecom industry has been highly appreciated by the Nigerian telecom operators. This time when the Nigerian President heard the progress, he was very pleased and encouraged Huawei to proceed even faster. ‘The faster, the better’ he said.
