UNLESS mysterious acronyms such as UMTS/CDMA and CDMA2000 are your daily stock in trade, it is unlikely you may have heard of Huawei, one of China’s most successful - but low-profile - high-tech companies.

　　Established in 1988 and centred in Shenzhen city near Hong Kong, the company has grown seemingly by stealth to become one of the largest telecoms equipment manufacturers in the world … by making top-line goods for other manufacturers.

　　Experts say it would be difficult to discuss the telecoms business without mentioning Huawei, the “coy colossus” of China.

　　Its relatively low profile is explained by the fact that most of its products to European markets are “white label” goods that carry the operators’ brands. For example, Huawei makes one of Vodafone’s most popular 3G mobile phones, called the V710; nearly one million units have been shipped so far.

　　Its global headquarters in Shenzhen is more of a small town than an office building; the campus stretches to nearly a square mile (2.6 sq km) and a three-lane highway runs through the complex. More than 20,000 staff work there and 3,000 live on site in a residential area that has schools, playing fields and all the other necessities of urban living.

　　There is a vast research and development (R&D) department, a manufacturing complex, and a highly automated distribution centre that handles 30,000 raw materials but only employs 38 workers. And that is only the beginning.

　　Globally, Huawei employs more than 62,000 people, and in 2005 it had a turnover of 3.8 billion US dollars. In 2006, turnover was 8.5bn dollars; in 2007 that had almost doubled to 15bn.

　　It now holds more than 20,000 patents and counts most of Europe’s major telecoms companies among its customers. It has also invested heavily in the United Kingdom, setting up its European centre in Basingstoke, southern England.

　　Huawei was China’s biggest investment in the UK in 2005/6 and the company employs about 500 staff in the UK, up from 15 when it first landed in 2001.

　　In the UK, its technology will play a key role in the country’s telecoms infrastructure. One of the reasons for the company’s rapid expansion in the UK is BT’s 10bn pounds 21CN project that will create a next-generation telecoms network with unprecedented bandwidth and speed.

　　For Huawei, winning this contract was a bridgehead to an assault on European markets that has accelerated over the past two years, and its customers now include Vodafone, Orange and Telefonica, to name but a few.

　　Edward Chen, Huawei’s UK and Ireland managing director, explained: “The BT21 project cemented our credibility in Europe and gave us something tangible to build on. Vodafone, T Mobile, Telefonica … these and other tier-one customers see us as a partner because they have no concerns over our delivery capability - and that all stems from our being shortlisted for the BT contract in 2005.

　　“Prior to that, we had difficulty establishing ourselves in Britain. We started in 2001 with a small office in north London and the first four years were hard. We had just 15 staff and we struggled with the differences between Chinese and local issues, where running a business were concerned.

　　“As a global business, Huawei has recognised the importance of the south east of England as a cluster for most of the world’s biggest telecommunications companies, hence our decision to base our European HQ in the region.

　　“SEEDA [the South East England Development Agency, the government-funded body responsible for the economic and social development for that area] has been extremely helpful and has been instrumental in making key introductions for us in the UK,” added Mr Chen.

　　UK Trade & Investment is the government organisation that helps overseas companies to establish and expand their businesses in the UK, as well as aiding UK-based firms to expand abroad. UK Trade & Investment works in partnership with England’s regional development agencies, such as SEEDA, and with national development agencies in Scotland, Wales and Northern Ireland.

　　Staff at SEEDA worked closely with Huawei to assist it in practical terms, including introducing the company to professional service providers and helping to bridge the cultural gap during its negotiations with property agents during the expansion of the Basingstoke operation.

　　SEEDA chairman James Braithwaite said: “Huawei was the largest Chinese investment in the UK in 2005/6 and is of strategic importance to the UK and highlights the opportunities that Chinese companies have to develop their business in Europe.

　　“The investment by Huawei is of great importance to the region; it has created employment opportunities in the south-east, enhanced the cluster of world-class telecommunications companies operating in the region, offered opportunities in the local supply chain and added value to the regional economy.”

　　Huawei’s decision to expand its UK base has clearly benefited the company. From there, it oversees some 2,000 staff operating out of 15 offices within the European Union. In 2006, Huawei’s EU operation achieved sales of 2.05bn dollars, up 160 per cent over its sales in 2006, and it expects to see that figure grow by more than 50 per cent throughout 2008.

　　More than 25 per cent of its EU sales total were generated by the UK operation. It says the UK’s regulatory environment is particularly beneficent for Huawei but it is the UK’s immigration laws that give it the edge over the rest of Europe.

　　Edward Chen added: “A lot of our core support expertise is in China but if a customer in Europe tells us he needs that particular support, he needs it fast. The UK will issue us with visas for key personnel in just three to four days but it can take up to 20 days from when we make the request in most of Europe.”

　　To meet training requirements, Huawei recently opened a state-of-the-art European centre at its UK centre to enhance the firm’s ability to deliver quality training throughout the UK and Europe.

　　The company also established a fully functional, industry-leading technical assistance centre (TAC) at Basingstoke, allowing it to provide enhanced support services to the UK and Ireland market. The TAC is open 24 hours, all year round and is fully supported by trained product specialist engineers.

　　Back at Huawei’s huge exhibition hall at its Shenzhen base, the scale of the company’s ambitions becomes clear: as well as network equipment for fixed-line and mobile telecoms operators, it has a thriving terminal division that supplies devices such as mobile handsets, video-conference phones, wireless Internet routers and 3G data cards for laptops.

　　In total, the company shipped 27 million such devices in 2006 and almost 40 million in 2007. Its appetite for innovation seems as insatiable as that of the markets it serves. Half of its staff are dedicated to “the search for the new”; the company employs some 30,000 R&D engineers across the world.

　　It has such bases in Stockholm, Bangalore, Moscow, Dallas and San Diego, and 10 per cent of group revenues are spent on R&D. Although this is low in absolute terms compared with the sums spent by rivals, Huawei’s low-cost base gives it a distinct advantage.

　　“R&D cost is largely made up of the cost of people,” said Edward Chen. “To hire a Chinese engineer costs about a sixth of what it does to hire an engineer in America or Europe.” That applies to support staff as well, hence the frequent requests to the Foreign Office for visas.

　　It may have become a global colossus among telecoms giants but Huawei’s stealth in doing so seems to have been more by accident than design. Regardless, other Chinese companies may look on in envy because, in becoming as big as it has, Huawei has achieved something that has proved elusive to most other businesses in the People’s Republic. (Source: British Consulate-General in Chongqing)