Dubai: Huawei has come to define the pulls and pressures of global politics as much as any other issue one can think of. Evoking the brand’s name immediately conjures up thoughts of escalating China-US tensions - even among those who rarely ever keep track of such matters.
But none of this is allowed to be a distraction as Huawei, which built its global following around some of the trendiest smartphones of recent years, widens its universe of tech gadgets. Then there is the cloud and 5G, categories where the Chinese tech giant wants to lock horns with US and European competitors.
Charles Yang, President of Huawei’s Middle East operations, is well-placed to provide an update on where the company’s stands in its regional aspirations on 5G and cloud computing. And of having to do so amidst all that noise about US actions.
Gulf News: With Huawei, the ongoing impasse with the US casts some uncertainty for telcos when awarding 5G contracts. How is Huawei trying to diminish those concerns in the Middle East?
Charles Yang: Huawei began 5G research as early as 2009, has invested $4 billion in 5G R&D so far, and has the highest number of 5G patents of any company globally. We continue to invest in 5G joint innovation programmes—including many in the Middle East—so that we can innovate to support the businesses of tomorrow. And assist nations in achieving their national development visions.
Operationally, there are two main actions we are undertaking to address the current US entity list ban. First is how we look at our existing inventory in a manner whereby it can be sustained for longer.
That means taking a more focused approach in how we work with different regions and customers, ensuring any project we undertake will be delivered with the excellence we are known for. Secondly, Huawei is a sizeable global buyer of chipsets and components.
Many other Chinese companies are now worried that what has happened to us could happen to them. With such a huge demand, we believe there will be more companies that find a way to serve the needs of Huawei and other Chinese companies while ensuring compliance with the US sanction rules.
Huawei has been present in the Middle East for more than 20 years. Our customers trust us. They recognize our standards-based approach to 5G innovation, and the resulting contribution we are able to help bring to local economies.
GN: The UAE has already awarded 5G infrastructure contracts, while other Gulf states have—or are—doing the same. Does Huawei see itself as a major contender in the Gulf's emerging 5G space?
CY: The GCC in particular was among the global frontrunners in embracing 5G. Huawei was part of many of the first-phase 5G commercial rollouts in the Middle East and has continued to expand those networks with leading telecom operators. In particular, we see an opportunity to advance the 5G value proposition for businesses.
The real value of 5G transcends the telecoms industry and has transformative implications for the economy as a whole.
GN: Do you think the 5G race for vendors has only started, and that there will be enough big-ticket awards going around for some time?
CY: In the first-half of this year alone, many telecom operators in the region issued reports showing positive returns on 5G investments. Yet the 5G development journey is far from over. That’s why regulators in the Middle East have released policies that greatly promote 5G development.
There is tremendous work being done in 5G in markets like South Korea, for example, with those use cases applicable to organizations in the Middle East. Whether you look at finance, healthcare, education, or any other sectors, enterprises in the Middle East have a clear opportunity to integrate 5G into their core production processes.
GN: On 5G, which is your biggest win to date in the region?
CY: We look at the development of the overall 5G ecosystem as a barometer of our success. A positive 5G business cycle has now emerged. This can be seen in various domains. In just 19 months after 5G launched in the GCC, for example, 5G mobile phone users has exceeded 2 million.
That adoption is twice as fast as the adoption in the 4G era. Since the pandemic, gaming, HD video, remote working, and education have also become top home applications. In the enterprise domain, 5G business leased lines have increased substantially, growing from 230 a year ago to approximately 13,000 in the Middle East today.
Huawei is both honored and humbled to be a leader in developing this ecosystem in the Middle East.
GN: How far are you in making progress on your cloud operations?
CY: The Huawei Cloud is now available to organizations across the Middle East. It currently has 23 'regions' with 45 availability zones, offering more than 220 cloud services and more than 210 cloud solutions worldwide. We have already provided cloud services to various government departments, large enterprises, SMB, startups, and Internet companies.
In some ways, our cloud offering mirrors our carrier and enterprise business of a decade ago. We just set sail - but are now the fastest-growing mainstream cloud vendor, and one of the Top 5 clouds in the world. It is only the beginning.
Widening the cloud base
GN: Will cloud require standalone facilities in the Gulf and around the region? And do vendors need a legacy for clients to be comfortable with?
CY: The Huawei Cloud has established a ‘region’ in Abu Dhabi with more than 70 cloud services. A customer can select the service of the Abu Dhabi region or the services of other areas, such as our Singapore region. That said, we are expanding our footprint in locations like Saudi Arabia and other countries, as we want to bring cloud benefits to all countries in the Middle East.
Ultimately, the principle of the Huawei Cloud is to respect and maintain data sovereignty, and uphold data security demands of every country and every company.
In the Middle East, is Huawei's consumer division still the biggest operation for you? CY: In the first-half of this year, Huawei generated approximately $49.62 billion globally in revenue, with its net profit margin reaching 9.8 per cent. The consumer business generated $21.01 billion of the total.
CY: The Middle East and Africa region is a vibrant region for our Consumer Business Group. Although our smartphone business revenue dropped in 2020 globally due to chip supply issues, we adopted a strategy by rapidly adjusting our consumer business portfolio. We have thus maintained fast growth in both the device business and Huawei Mobile Services (HMS) in the Middle East.