Huawei Technologies, the Chinese telecommunications equipment company, is planning to invest $100-150 million (`520-790 crore) in 2012 in India as it bets on growth in the Indian telecom sector.
“Huawei is committed to a long-term engagement with India, and over a period of time technology platforms such as enterprise business, devices business, 2G expansions, 3G and Long Term Evolution (LTE) will fuel growth,” said Sures Vaidyanathan, Huawei India spokesperson.
Huawei supplies equipment to telecom companies which facilitate the delivery of these technologies to the end-users.
Its Indian arm, Huawei Telecommunications (India), is one of the largest information, communications & technology firm and supplier of broadband equipment in India.
In the last 10 years, the company has invested $1.5 billion, or about $100-150 million a year, in India on research and development (R&D), operations, marketing, manufacturing centres, development of the country as a sourcing hub and corporate social responsibility.
Sector analysts said the company is not stepping up immediate investment in India due to the cyclical nature of the business in the country.
This is because 2G equipment demand is slowing down and the government is planning to incentivise domestic equipment manufacturers, they said.
They, however, said 3G and LTE may compensate for this in the time to come and the Chinese player may achieve higher market share in India under these two platforms.
LTE is a standard for wireless communication of high-speed data, which is used for mobile phones and data terminals.
According to telecom analysts, many leading international equipment vendors including Huawei are conducting LTE deployment trials with leading Broadband Wireless Access vendors like Reliance and Aircel. Experts said by July-September quarter of 2012, LTE rollouts should commence in India.
Currently, India contributed 3% to Huawei’s total global net revenues of yuan 185,176 million in 2010, which, analysts said would touch double digits in five years.
The key contributor of revenue in India is traditional network operations followed by enterprise and mobile devices, which are currently small.
Huawei this year launched enterprise business in India, under which it delivers broad product portfolio and solutions to channel partners. By 2015 the business is expected to generate revenue of $1 billion from contract sales in India.
Huawei is also bullish on revenue from mobile devices in the country.
“From 2012 we will aim for equal contribution towards contract sales from the three businesses offered in India — traditional network operations, enterprise business and mobile devices,” said Vaidyanathan.
Huawei has also set up its largest R&D centre in Bangalore at an investment of $400 million over the last 10 years. “It is imperative that a company uses India’s software prowess and synergise that with China’s manufacturing strength,” said Vaidyanathan.
The writer was in Beijing at the invitation of Huawei Technologies
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