Huawei unveils $2B UK investment plan

Huawei pledged to invest £1.24 billion ($2 billion) in the UK over the next five years in its UK operations and procurement.

In a London meeting with UK Prime Minister David Cameron, Huawei CEO and founder Ren Zhengfei said the Chinese vendor will spend £622 million on establishing a number of "global centers of technical and financial excellence." The firm's UK workforce should nearly double to around 1,500 employees by 2017. A further £622 million of UK investment will be generated by Huawei's procurement activities.    

In announcing the investment plan, Ren took the opportunity to praise the UK's open economy and foreign investment initiatives. "The UK is an open market, which welcomes overseas investment," he said in a statement. Huawei added it is working with all the UK's major operators and broadband service providers and had made a "significant contribution to national broadband strategy."

 Ren's praise for the UK might also be seen as a dig at other countries that have not been so welcoming. As a former member of the People's Liberation Army (PLA), serving in the engineering corps, Ren and Huawei are still viewed with suspicion in some quarters. In the United States, fears over national security have played a big part in preventing Huawei from landing a contract with one of the country's larger operators. And Huawei's efforts to buy U.S. tech firms have similarly been stymied.

Last year the U.S. Committee on Foreign Investment in the United States opposed Huawei's purchase of 3Leaf, a server-maker that had gone bankrupt, on grounds of security. In March the Australian government blocked Huawei from taking part in the country's NBN (National Broadband Network) project.       

These setbacks aside, Huawei has made remarkable progress on the international stage since starting out as a reseller of telephone-exchange equipment in 1987. Supplying network equipment to fixed and wireless carriers, as well as mobile devices and professional services, Huawei's revenue totaled $32.4 billion during 2011, an 11.7 per cent jump from the previous year. And sales from international operations continue to grow faster than domestic sales. Revenue in China rose 6 per cent during 2011, but international revenue leapt 15 per cent. About two-thirds of Huawei's total turnover is now generated abroad.

Huawei has also bene making inroads into the UK market. In May Telefónica's O2 UK awarded Huawei a five-year deal to plan and manage the operator's mobile core network. Huawei also announced plans in November 2011 to open a mobile devices design centre in London as part of its efforts to become a leading smartphone vendor in Europe. 

For more:
- see this Huawei release
- see this Reuters article
- see this Dow Jones Newswires article

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