Building virtual bridges in South African markets

By Xing Zhigang and Li Jiabao (China Daily) Updated: 2014-05-06 11:28

An assistant waits on a customer at a Huawei Technologies Co Ltd store in Beijing. Mark Ralston / AFP

Huawei banks on enterprise business to construct a platform for growth, report Xing Zhigang and Li Jiabao in Johannesburg

In its first six years, Huawei Technologies Co Ltd said it didn't make any money from its business in South Africa. It now holds the largest or the second-largest market share in the South African information and communications technology market, with established Western brands as main competitors.

The company plans to use South Africa as a bridgehead to other markets in Africa.

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Established in 1998, Huawei Technologies SA (Pty) Ltd has 1,000 employees, more than 65 percent of them local hires. The company's business groups are made up of the carrier network, which seeks to build alliances with local telecom providers; the enterprise business, which provides solutions and equipment for government, banks, educational institutions and large companies; and the consumer business, which includes selling mobile phones, tablets and data cards, said Alice Qi, Huawei South Africa's head of public affairs and communications.

Speaking in her office at the Grayston Office Park near Sandton, Johannesburg, Qi said the office also serves as the Shenzhen-based telecom company's hub for its southeast African operations covering countries such as Lesotho, Mozambique and Swaziland.

"Among Chinese enterprises in South Africa, we probably have the most employees. In the country's information and communications technologies industry, we are the only one that has teamed up with the top five carriers Telkom, Vodacom, MTN, Cell-C and Neotel.

"We are ranked number one or two based on our market share in South Africa. Most of this market share has been won from established Western brands through stiff competition, and we hope to consolidate our gains further through continuous investment."

After entering South Africa, Huawei kept on investing but did not make money from sales of products or solutions until 2004, she said.

"Gradually, we were accepted by the market and started to produce data cards for Vodacom, a local carrier. It's our technology but their label. Then we started to work with local carriers."