Huawei prepares for life after founder Zhengfei

Huawei executive vice president, Eric Xu, said the company will end its practice of rotating its CEO as part of changes to the management structure designed to prepare the company for the departure of founder, Ren Zhengfei.

Huawei EVP, Eric Xu

Eric Xu, Huawei EVP and rotating CEO

Xu told analysts on Wednesday that Huawei will eventually be run by a management board rather than Zhengfei alone, and that its practice of sharing the role of acting CEO among three executives will be ended by the switch in strategy. Xu stopped short of putting a timeline on the restructure, stating only that the future company will not be run by one man alone, Reuters reported.

Huawei began sharing the role of acting CEO between Xu, and deputy chairmen Ken Hu and Guo Ping, in 2011. The move was, in part, designed to allay fears about the security of its equipment, which centred on Zhengfei's relationship with China's government.

The founder and CEO is a former army officer, which has led to allegations that he maintains close links to the government.

Xu, who was replaced as acting CEO by Guo Ping on April 1, told the analysts he expects little impact on the company's growth after claims the U.S. National Security Agency (NSA) developed backdoor access to Huawei's servers in order to spy on the company.

The claims were made by Edward Snowden, a former NSA contractor who blew the whistle on what he said is widespread communications snooping by the NSA and its UK counterpart, GCHQ.

At the time, Xu said the company would have known if its equipment had been compromised.

Analysts are concerned international governments may start to block Huawei's equipment as a result of the ongoing speculation about security, particularly after China warned domestic companies against buying U.S.-made equipment, Reuters reported.

While Xu predicted little impact on Huawei's sales growth, he conceded it is becoming "tiresome" to explain the security situation to customers.

Xu also predicted Huawei's business mix will change in the next five years, with revenues from its carrier business likely to account for up to 60 per cent of total sales in 2018 compared to 70 per cent in 2013. The company will make up for the decline with higher income from its global service division, and enterprise unit.

For more:
- see this Reuters article
- see Huawei's most recent rotating CEO announcement

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