2011-07-22 11:00

PARIS - For a company that is the epitome of China's manufacturing strength, Huawei has always managed to keep a low profile. But the second-largest telecom solution provider in the world is now giving the final touches to a strategy that it hopes will further consolidate and strengthen its presence in the highly innovative and demanding European market.

Huawei, had a global turnover of $28 billion (20 billion euros) last year, just behind its European rival Ericsson, which had a comparative figure of $30 billion. The company offers goods and services ranging from infrastructure to consumer handsets and has over 5,500 employees spread across several European countries. While its European headquarters is in Dusseldorf, it also has presence in countries such as France, Belgium, Holland, Poland, Romania, Spain and the UK.

Leo Sun, chief executive of Huawei France and the man who is spearheading the European thrust, says Huawei will rely largely on its cutting edge in research and development (R&D) to help achieve its goals.

"We have more than 18,000 patents and almost 50 percent of our employees are dedicated for R&D. In other words, we have the biggest R&D force in the world. Thanks to that innovation, we can maintain our global leading edge in innovative technology," he says.

Sun says that most of Huawei's efforts would be centered on tackling competition from rivals like Ericsson in the telecom sector, and others like Nokia, Siemens and Lucent in the network infrastructure market. But the company will take advantage of the opportunities in Europe to strengthen its presence in the enterprise and consumer sectors.

"We believe that our strong R&D capabilities will help in the diversification process and boost growth," Sun says.

Though for most of the last two years Sun was the country manager for Huawei subsidiaries, his new assignment in Brussels as chief executive of Huawei France will focus largely on building partnerships with European institutions and industries.

"Till now, we focused largely on finding solutions that help build value for customers. But as a Chinese company that is investing in Europe, and having grown in scale, it is essential for us to now integrate fully into the industrial environment for sustained long-term growth. For this it is also imperative for us to fully understand the European market, the regulatory environment and other social issues," Sun says.

"We also need to develop common interests between the company and the society so that both can gain from the development. This would be the key focus for us in Europe," he says. The work force is another area that the company will rely on to drive growth in Europe. Most of Huawei's employees in Europe are Europeans. Last year, Huawei France became the first Huawei subsidiary to be led by a European when the Frenchman Francoise Quentin became its chairman.

"He has taken a very important strategic management position in Europe to help define our strategy," says Sun.

"We are planning to ramp up hiring in Europe over the next three to five years. But there is also the challenge for us to get these people on board as early as possible since it takes time for them to integrate with our corporate culture," he says.

Sun says that the company will work more closely with the European universities to help more young people understand the company, the sector and the industry.

Given that Huawei has already quintupled in size over the last six years, there are also questions on how the company views the future. But Sun remains unfazed and says that there is still enough room for growth in Europe.

"Between Europe and China, as regards telecoms, there is a lot of potential to grow together. Broadband telecommunication is the main thrust of the European telecoms policy, and there is a goal to have 100 percent digital broadband coverage by 2013. It is a big program that also has some difficulties," he says. According to Sun, Huawei believes in providing broadband access to all those who have the rights and means and does not consider it just as a matter of investment but also the use of innovative technology.

For Huawei, there are a lot of synergies in future as communication needs are increasing, he says. Opportunities are no longer limited to voice, but extend to broadband data and multimedia and communication is not just through personal computers, but also through smart phones, tablets and cloud-computing.

"Strategically, these are all important areas that we would like to get involved in the future in Europe." Sun says that in most of the new domains the market is still not fully globalized. In the telecom sector, only the solutions provider domain is a globalized market. "Because of globalization, competition is fierce and requires companies to be extremely innovative and customer- and client-oriented. At Huawei we will strive to maintain our lead in the technology sector," he says. Sun is candid when asked whether Europe was a tough market for foreign firms.

"I cannot say Europe is especially difficult, but the European market is highly innovative and extremely demanding. So we will look to hone our strengths in marketing and R&D investment," he says.