Huawei forecasts strong rise in revenue
By Rich Zhu |
April 1, 2010, Thursday
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Print Edition
Print Edition
HUAWEI Technologies, whose net profit more than doubled in 2009, forecasts a strong increase in revenue in 2010 as it expects sales in overseas markets and domestic demand for 3G equipment to grow, China's biggest telecommunications equipment maker said yesterday.
However, domestic telecom operators are expected to cut spending this year, which may force Huawei to expand more in overseas markets, industry insiders said.
Huawei, the world's No. 2 telecom equipment maker behind Ericsson, earned 18.3 billion yuan (US$2.7 billion) in net profit last year, compared with 7.8 billion yuan a year earlier. Its revenue jumped 19 percent to 149.1 billion yuan. The Shenzhen-based firm's cash flow soared 237 percent to 21.74 billion yuan by the end of 2009.
"We see our business momentum continuing in 2010 and expect year-on-year revenue growth of 20 percent, driven by increased deployments of mobile and fixed broadband networks, further take-up of customized smart devices and higher demand for professionally-managed services," Chief Marketing Officer Ken Hu said in a statement.
In contrast, most overseas telecom equipment giants forecast revenue in 2010 to remain unchanged or grow less than 5 percent, according to market watchers.
Huawei's business was also driven by China's issue of 3G licenses in January last year. China Mobile, China Unicom and China Telecom have invested heavily to upgrade their networks to 3G.
But the Chinese telcos will probably cut spending by 22 percent this year to improve their profitability, Wendy Liu, an analyst at Royal Bank of Scotland, said in a recent note.
Huawei has overtaken Alcatel-Lucent and Nokia-Siemens to rank second in the global telecom equipment market, industry insiders said.
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