Asia News Sep 22

Huawei launches ad-blitz to protect Indian turf

While the advertising campaign was launched to mark its 20 years of India-presence, experts say having invested billions, Huawei also has to fight India's growing anti-Chinese sentiments

Huawei launches advertisement blitz to protect Indian turf
The Huawei logo. Photo: Huawei.

In a surprising twist to the saga over allowing Chinese telecom gear makers supply equipment in India, Huawei announced it has launched an advertising campaign to reaffirm its commitment to the country.

The Chinese telecommunications technology provider said that the campaign marks 20 years of helping to build a better-connected India. It underlines “Huawei’s long-term partnership to India’s digital journey, supporting the government’s Digital India and Skill India visions through close help foster a healthy and robust ICT ecosystem”, Huawei said in a statement.

But while the announcement comes as the Indian government mulls sidelining Huawei and other Chinese companies in its domestic telecom market, experts say it has also become imperative for Huawei to defend its market.

“Huawei, with a near third of the market share, has a lot riding on India. It is not surprising that it would want to defend its turf, build on it and even address whatever security or other concerns there are about its equipment,” Mahesh Uppal, a director at ComFirst, a consultant company specialising in regulation and policy, told ATF.

High stakes

Indeed, already the world’s largest telecom equipment maker - both wired and wireless – the Chinese tech giant is also the largest gear supplier by a wide margin, with a market share of 31% in the first half of 2020, according to research firm Dell’Oro Group.

That represents a rise from the 28% from 2019, and pushing the global giant Nokia to second place with 14% in the same time period, a drop from 16% a year earlier.

Huawei first overtook Nokia in 2015 and the gap has widened every year since.

It has invested $2 billion and spent $200 million on its R&D centre in India in the past two decades. That's Huawei's largest R&D unit with ongoing development of core technologies outside of China, the company said. It also runs the largest global service centre from India, which handles the running of telecom networks across 30 countries. These operations are supported by 6,000 employees, of which 4,000 are deployed in R&D and 1,200 in the global service centre.

“For Huawei, India is not only a large market, but a large growing and unsaturated market,” Uppal added.

READ MORE: As US ban on Huawei starts, China tech giant claims 31% of market

But it is also fenced in by restrictions on all sides amid border hostilities between China and India in June that drove Delhi to join the US and UK in flagging security concerns over Huawei’s links to the Chinese government.

In June, for instance, Reuters reported that officials instructed state firms to keep Chinese telecom equipment out of their networks in favour of domestically sourced technology.

In late August, the Financial Times reported that Indian officials are likely to quietly push Chinese telecommunications gear, including from Huawei, out of the country’s networks, rather than publicly implement a legal block and risk further rebuke from Beijing amid mobile app bans and other political tensions.

The advertising blitz also comes as the company battles plunging demand for its equipment and services.

According to reports, Huawei-India, which follows the calendar year for accounting and posted $1.2bn in revenue in 2017, is now targeting $350-$500m revenue for 2020. It also, reportedly, plans to lay off 60%-70% of its Indian workforce.

The revision in projected revenue was partly driven by competitors like Ericsson, Nokia and Samsung upping their ante in the wake of the country’s pushback against Chinese companies. It was also due to dwindling orders from its only two major telecom customers, a report said.

Huawei refused to comment on any of those.

A local company

The company insists it is more Indian than Chinese.

“Huawei has been a proud partner to India’s digital transformation over the last 20 years, since the start of its R&D Center in 2000, Huawei’s presence in India today is the largest overseas and most localized," said David Li, CEO, Huawei India while launching the blitz.

Besides, added Li, Huawei has helped the Indian ecosystem to grow and integrate  into a global value chain for a self-reliant India. In those years, Huawei become a strategic partner for India’s digital transformation, by delivering secure networks, introducing world-class technologies for India’s needs, creating jobs and contributing to India’s economic growth, the company added.

Meanwhile in yet another twist, Minister of State for Electronics and Information Technology Sanjay Dhotre said last week that the government had no plan to exclude Chinese telecom companies, including Huawei, from the country’s planned infrastructure contracts.

While the announcement somewhat quells fears of Chinese players being kept out from participating in India’s ensuing 5G trials and roll outs, it also “suggest[s] that the government is certainly not rushing in to take any hasty decision,” says Uppal.

READ MORE: Huawei inks deal in Shanghai to create its own microchips

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