Huawei revenue booms in the Middle East as vendor plans focus on LTE

Huawei said revenue from its business in the Middle East increased by 18 per cent to $2.08 billion (€1.6 billion) in 2012, and emphasised that its future business growth in the region will come from the rollout of LTE networks and IT outsourcing.

"Operators' shift toward software-defined networks, IT outsourcing and adoption of 4G ... are all going to play a key role in Huawei's future business," Shi Yaohong, president of Huawei Middle East, told Reuters.

The Middle East accounted for 5.9 percent of Huawei's $35.35 billion global revenue last year, up from 5.5 percent in 2011, according to Reuters' calculations.

"By expanding our local portfolio to include more smartphones, tablets and Wi-Fi routers that are compatible with technologies like 4G LTE, we hope to open up the market significantly over the next 12 months," Shi said.

Huawei has not revealed any profit or capital expenditure figures for the region, but its disclosure of revenue is viewed as an effort by the vendor to appear more open.

Huawei, which is also the world's fifth-largest smartphone manufacturer, has been stung by recent accusations of anti-competitive behaviour, and along with its domestic rival ZTE could face an investigation by the European Union trade minister Karel De Gucht.

In separate developments this week, De Gucht is now seeking an investment pact with China that could be a precursor to a free-trade deal, Reuters said. However, such a pact will only be possible if the EU and China can work out their differences.

Despite EU concerns over possible Chinese state subsidies and dumping activity, the bloc clearly wants to maintain and increase trade links to help it recover from its economic downturn.

De Gucht sees a potential investment pact with China as part of a wider strategy to force Beijing into line with international trade rules, Reuters reported.

"An EU-China investment agreement will help deepen our ties and sends the signal that we are firmly committed to building a strong partnership", said De Gucht in a statement. "The agreement needs to secure existing openness and deliver new liberalisation of the conditions for accessing each other's investment market. Crucially, it should also improve the treatment of investors and their assets--including key technologies and intellectual property rights. I look forward to working with the new Chinese government to reach a deal."

The EU said goods and services worth well over €1 billion are traded between China and the EU every day, but noted that the current investment flows fall short of the potential of the economic relationship of between two of the most important economic blocks on the planet. According to official Eurostat data, in 2011 European companies invested €17.5 billion in China, whereas China invested €2.8 billion in the EU in the same year.

For more:
- see this Reuters article
- see this separate Reuters article

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