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November 21, 2014

Huawei: ‘We will not today, nor ever will be, a price killer’

Success in the UK will come from word of mouth, says IT head.

By Ben Sullivan

Huawei, the Chinese IT, telecoms equipment and smartphone provider, has told CBR that it is not in a bottom pricing strategy race with its competitors.

Speaking to CBR at Huawei’s CIO Forum in Amsterdam, the comments came in reply to questions regarding claims from companies such as Cisco that Huawei is undercutting competitors with its pricing.

Yelai Zheng, Huawei’s president of IT products, told CBR: "A healthy ecosystem is the most important thing for us and our customers."

"Huawei is not today, nor ever will be, a price killer. We can’t control what our competitors say, but we can just be the best."

Zheng said: "Huawei is not in a race to the bottom strategy."

Huawei has come under fire in recent years for its strategies, with Cisco boss John Chambers arguing that Huawei "does not play by the rules," accusing the firm of stealing patents and intellectual property. The company is also accused of using Chinese subsidies to claw at global market share.

But intellectual property is one area in which Huawei is particularly proud of, boasting over 47,000 patents brewed from its numerous global R&D centres.

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"It’s all about the values we bring to our customers," said Zheng. "Many customers completely change their minds about Huawei after they have visited our Shenzhen headquarters. We like to push the envelope."


Despite being active in the UK for ten years in the telecoms business, when it comes to IT equipment, Huawei is lagging in terms of sales and channel partners with just over 100 signed up. Huawei’s IT division evolved from its telecoms business and now provides many infrastructure platforms such as cloud and converged storage.

CBR quizzed Zheng on the slack sign-ups, to which he responded: "Customers can judge by themselves. Word of mouth is the best way for us to spread our popularity – raising the awareness of our brand."

Zheng added: "We’ve always seen Europe as one of the most important markets, it’s like our second home market."

Brand awareness is certainly a decisive barrier for Huawei penetrating the UK IT market. However, Zheng believes it is only a matter of time before customers see the true quality of Huawei equipment and services.

He said: "People just remember us for our wireless products, or are phones, because these products are so great."

"In terms of technology, we have to better ourselves against our other divisions to prove to people that we are the best. For us, we don’t see [brand awareness] as a barrier, but we want people to know we are more than just phones.

"IT is a conservative space, especially in the UK and European markets. We [IT products division] have only been around since 2011 so entering a market that has older sales models and legacy is different. "We have no legacy yet, but we have tremendous hope for Europe."


In the post-Snowden world, Huawei has been embroiled in spying and backdoor claims with the US, hindering its success in the region.

But Zheng said customers should have no qualms with the firm’s integrity.

"Our storage CTO [Cameron Bahar] is based in the US, and our head of security is a Brit. We’re not worried at all, and our customers should have no worries either."

"We have to answer to our cyber security head [former government CIO John Suffolk], he is in a great position of power."

Snowden revelations over the summer revealed that the NSA allegedly stole source code for Huawei’s products with the aim of exploiting vulnerabilities, leading to the ability to spy on the Chinese company. The revelations came in contrast to previous US allegations that it was Huawei itself spying on the US

An internal NSA document penned back in 2010 reportedly said: "Many of our targets communicate over Huawei-produced products.

"We want to make sure that we know how to exploit these products … to gain access to networks of interest."

CBR questioned Zheng on the apparent irony of US allegations, if the NSA really did attempt or successfully enter Chinese equipment.

Zheng replied: "We have a saying in China, it is that we can neither laugh nor cry."

For now, it seems, Huawei is content with proving its strength through the virtue of its products rather than getting tangled up in politics, a chapter which it seems keen to move on from.

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