As Huawei edges closer to Ericsson as the world’s biggest maker of telecommunications equipment, it is also taking steps towards becoming the first true Chinese multinational.
On Monday the group announced a number of measures aimed at addressing foreign criticisms of its alleged lack of transparency. Though Huawei won’t turn into General Electric overnight, the moves are likely to help the group’s standing abroad.
Huawei’s reforms include decentralising decision-making, giving a greater say to local managers, and devolving power to four newly-created business divisions.
But, as the FT reported, the big news is that Huawei made public the members of its board for the first time – publishing a list of names, pictures and biographies of the people who run the company in its 2010 annual report. That looks squarely aimed at allaying US concerns about its alleged links to the Chinese military.
Chief among the board is Ren Zhengfei, founder and chief executive, who was once an engineer in the People’s Liberation Army. Among the nine executive directors is his daughter, Meng Wanzhou, the chief financial officer; while the five-person supervisory board includes Ren’s brother, Ren Shulu.
Kathrin Hille, the FT’s Beijing correspondent, writes:
The annual report reveals a key restructuring, with the dissolution of the nine-member executive management team that sat under the directors’ board – and the transfer of power to four newly-created divisions – carrier networks, enterprise customers, devices and other businesses.
The change goes hand-in-hand with efforts to de-centralise research and development with different centres around the globe focusing on different products and technologies, and to give local management in important markets a voice more independent of headquarters – all these maybe the first signs of the emergence of a true Chinese multinational.
The company expects the reform, adopted after a board election in December, to make it more agile and flexible as it aims to sell more equipment and services to corporate customers.
Huawei in the past felt little need to restructure, as it grew faster than competitors and grabbed international market share.
But having reached Rmb185.2bn in revenues last year and a 110,000-strong workforce, the company recognises that its expansion is slowing down and it needs to look for new opportunities outside its traditional core business of selling network gear to telecom operators such as British Telecom, Telenor, Etisalat or China Mobile.
One target market is handsets and other mobile devices. Telecom network sales grew 22 per cent to Rmb122bn, while device sales expanded 24.9 per cent and services grew 28.6 per cent.
Huawei’s Rmb185.2bn earnings equate to $27.36bn, based on average exchange rates. On the same basis, Ericsson sales came in at $28.3bn. Given Huawei’s much faster sales growth, the Chinese company has almost certainly already overtaken Ericsson – but confirmation won’t come until both companies publish their next set of numbers.
Nokia Siemens Networks (2010 revenues €12.7bn) has set a date of April 29 for completing its $975m acquisition of Motorola’s wireless telecommunications network businesses, after Huawei dropped court action it had taken in China to delay the deal. But even when the transaction is completed the combined group’s estimated turnover will be well short of both Ericsson and Huawei.
Despite the problems Huawei faces in trying to grow through acquisitions, China’s first multinational seems to be getting by just fine.
Source: http://blogs.ft.com
On Monday the group announced a number of measures aimed at addressing foreign criticisms of its alleged lack of transparency. Though Huawei won’t turn into General Electric overnight, the moves are likely to help the group’s standing abroad.
Huawei’s reforms include decentralising decision-making, giving a greater say to local managers, and devolving power to four newly-created business divisions.
But, as the FT reported, the big news is that Huawei made public the members of its board for the first time – publishing a list of names, pictures and biographies of the people who run the company in its 2010 annual report. That looks squarely aimed at allaying US concerns about its alleged links to the Chinese military.
Chief among the board is Ren Zhengfei, founder and chief executive, who was once an engineer in the People’s Liberation Army. Among the nine executive directors is his daughter, Meng Wanzhou, the chief financial officer; while the five-person supervisory board includes Ren’s brother, Ren Shulu.
Kathrin Hille, the FT’s Beijing correspondent, writes:
The annual report reveals a key restructuring, with the dissolution of the nine-member executive management team that sat under the directors’ board – and the transfer of power to four newly-created divisions – carrier networks, enterprise customers, devices and other businesses.
The change goes hand-in-hand with efforts to de-centralise research and development with different centres around the globe focusing on different products and technologies, and to give local management in important markets a voice more independent of headquarters – all these maybe the first signs of the emergence of a true Chinese multinational.
The company expects the reform, adopted after a board election in December, to make it more agile and flexible as it aims to sell more equipment and services to corporate customers.
Huawei in the past felt little need to restructure, as it grew faster than competitors and grabbed international market share.
But having reached Rmb185.2bn in revenues last year and a 110,000-strong workforce, the company recognises that its expansion is slowing down and it needs to look for new opportunities outside its traditional core business of selling network gear to telecom operators such as British Telecom, Telenor, Etisalat or China Mobile.
One target market is handsets and other mobile devices. Telecom network sales grew 22 per cent to Rmb122bn, while device sales expanded 24.9 per cent and services grew 28.6 per cent.
Huawei’s Rmb185.2bn earnings equate to $27.36bn, based on average exchange rates. On the same basis, Ericsson sales came in at $28.3bn. Given Huawei’s much faster sales growth, the Chinese company has almost certainly already overtaken Ericsson – but confirmation won’t come until both companies publish their next set of numbers.
Nokia Siemens Networks (2010 revenues €12.7bn) has set a date of April 29 for completing its $975m acquisition of Motorola’s wireless telecommunications network businesses, after Huawei dropped court action it had taken in China to delay the deal. But even when the transaction is completed the combined group’s estimated turnover will be well short of both Ericsson and Huawei.
Despite the problems Huawei faces in trying to grow through acquisitions, China’s first multinational seems to be getting by just fine.
Source: http://blogs.ft.com
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