March 7, 2016

HUAWEI: Splendid achievement

By Onome Amawhe

HUAWEI Technologies, the leading provider of next generation telecommunications solutions, has been conducting business in Nigeria for 16 years. Since entering the market, the company has helped to improve Nigeria’s ICT infrastructure which plays an important role in GDP growth and job creation. Frank Li is the Managing Director of Huawei Nigeria.

Frank liHe is tasked with driving a diversified business with a strong heritage but he is grappling with a reality: That there is still a huge digital divide. “There is a huge demand potential regarding access to the network from our carrier customers, enterprise customers and devices consumers.

And as a leading ICT solution provider, we have a huge responsibility to enlarge the ICT infrastructure and to build a better connected Nigeria.” Huawei’s innovative and affordable solutions; quick response to customer needs and dedicated services are the strengths that has sustained the company’s brand in the Nigerian telecoms market.

 Affordable solution

This is why Frank Li is so confident about the company’s growth prospect going forward: “I am very optimistic about economic growth in Nigeria. I believe that ICT technologies are going to play a more important role in this process and Huawei is committed to delivering innovative, affordable solutions and dedicated services to Nigeria”.

The company’s plan over the next five years is to enlarge the ICT infrastructure and build a better connected Nigeria.  Huawei’s core business in Nigeria is consistent with its global strategy which includes carrier, enterprise and consumer businesses.

“We provide products to our carrier customers to build their networks and offer integrated solutions to the enterprise customers as well as provide devices such as smart phones, tablets and home devices”. Huawei’s most significant contribution to the Nigerian telecoms market is its dedication to bridging the digital divide and promoting broadband penetration. Working with Nigerian telecom operators, Huawei has built backbone transmission networks spanning over 7,000 km and constructed over 18,000 mobile base stations. The number of mobile users has increased from 27,000 in 2000 to more than 117 million today.

The penetration rate has also risen from 0.02% to 83.7%. And voice-call charges have decreased from US$1 per minute to about US$0.06 per minute. Thanks to Huawei’s efforts, millions of people have been able to make their first phone call and enjoy affordable communications services.

“After 16 years of development in Nigeria”, Li says “Huawei has received an excellent response from the market and aims to expand its investments in the coming years. To this end, the company has  set up strategic alliances with powerful local partners and secured a WIN-WIN business partnership, Innovative and dedicated solutions for our customers’ needs.

 Positive alliances

All these inroads have been made to bring genuine and significantly value to our customers”. As all positive alliances unfold, the major challenge the company faces in its quest for growth and opportunities is how to bring innovative technologies and solutions as well as dedicated services to Nigeria.

In the face of these hurdles, Li thinks there is light at the end of the tunnel: “The infrastructure still has room for improvement. This is not just Huawei’s challenge but one for all the players”.

Corporate Social Responsibility is an integral part of this telecommunication giant’s business model and it’s hugely embedded in all its business processes. The company’s standards for promoting ICT efficiency is a good example of this.

In a move towards improving the CSR reputation of the company, Huawei recently partnered with the government of Nigeria to provide 2000 Information and Communication Technology and ICT training opportunities to young Nigerians in 2016 under “Huawei’s Seeds for the Future programme”.

During the launch of this initiative, the company stated: “Huawei has long been committed to developing Nigeria’s ICT sector, and is working hard to build a Better Connected Nigeria.

Cutting-edge ICT technologies

At the same time as delivering cutting-edge ICT technologies and services to Nigeria, we are also committed to fostering a skilled local ICT workforce.” The company went on to reiterate that: “As a leading global supplier of ICT products and solutions, Huawei will continue to share its global experience in the development of the ICT industry with the Nigeria government. We hope to become a strategic partner to the Nigeria government in future ICT planning and development, and will continue to expand our contributions and training programs in Nigeria”.

The literal meaning of the Chinese word H-U-A-W-E-I is “Splendid Achievement”. The company was founded in 1987 and in a relatively short time has become a multinational company exceeding the market share of many of its competitors, including multinational giants like Nokia and Ericsson. Indeed, there are few examples of newly established multinationals that has conquered the global market within a short period of time. How does one explain this fast development? Was it thanks to the huge Chinese market which enabled Huawei to grow before it became global? Li explains that the rapid growth is due to the company’s focus on customer needs and heavy investment in R&D, technology and innovation. In the past 10 years, the Chinese Telco has invested more than $30 billion into all these focus areas.

Huawei  has always emphasized the importance of adapting its products to the needs of the customers. In the beginning, Huawei products were hardly present in the market. The company’s technology wasn’t better than that of its competitors. The cities were dominated by foreign companies. But this gradually changed. Huawei focused first on China’s rural areas that had been ignored by its competitors and started to develop better solutions than they did. It also invested heavily in R&D and adapted products to the needs of local customers while competitors reacted slowly. Today Huawei products are present everywhere in China as well as around the world. Huawei is the vision of Ren Zhengfei, the Chinese businessman who built Huawei into arguably the most disruptive infrastructure player in the mobile market. “When Huawei was still very small”, Li says “the CEO and founder,  Ren Zhengfei, said, ‘we can learn. We should learn management experience from other companies’.

So, Huawei invested heavily in management. And it is the Huawei employee shareholding mechanism that has enabled employees to share the success of the company. 84,000 of our employees hold company shares. And the biggest individual shareholder is Mr. Zhengfei, our founder. He only has 1.4% of the company shares.” In fairness to Western vendors, they have never had the opportunity to run a company in the way that Huawei’s founder has. With access to a huge workforce that expected far lower rates of pay than their Western counterparts,  Huawei  marketed itself initially to the MNOs on price, picking up business in emerging markets from carriers with less money to spend. While this kept the firm out of the top tier carrier market during its early years in the game, the situation today is altogether different.

Now an established provider to the premier league of mobile carriers,  Huawei  is in an even better position to press home its advantage. In validating this argument, Frank Li explains: “The major driving force behind Huawei’s rapid growth is development in customer needs and technology.

Established provider

Over the past decade, we have been  investing more than 10% of our sales revenue into R&D. Because no matter how the economic environment changes, we believe that only by continuously investing in technology will we be able to provide the highest returns to our customers.

Among the 150,000 Huawei employees worldwide, 45% of them are engaged in R&D. Therefore, our successors should not work for authority or money, but rather for this ideal. As long as they pursue this ideal, they will be able to lead the company successfully”.

The one part of Frank Li’s personal nature that has contributed to his success as Managing Director of Huawei Nigeria is that once he set targets, he spares no effort to achieve them along with his team. His focus is to keep working with stakeholders to build a better connected Nigeria.

“Huawei will follow the strategy of localization, investment expansion, and technology transferring and talents cultivation in order to share our business success with Nigerian partners”, he pledges.