Guo: "Companies that choose to work with Huawei will be the most competitive in 5G"

Huawei has announced strong business growth for 2018, with sales revenues rounded off at RMB721.2 billion, up 19.5% year-on-year. Net profits reached RMB59.3 billion, up 25.1% year-on-year.

Source: Huawei Annual Report. Detail from the cover of the report.

In the Rotating Chairman's Message within the 2018 Annual Report, Guo Ping, Huawei's Rotating Chairman alluded to outside distractions, while the report refers to adversity in 2018. In his message Guo said, "Information communications technology is rapidly working its way into every industry. This has triggered a digital, intelligent transformation – the driving force behind our digital economy. Through heavy, consistent investment in 5G innovation, alongside large-scale commercial deployment, Huawei is committed to building the world's best network connections.

"Throughout this process, Huawei will continue to strictly comply with all relevant standards to build secure, trustworthy, and high-quality products. As we work towards this goal, we have been explicitly clear: Cybersecurity and user privacy protection are at the absolute top of our agenda. We are confident that the companies that choose to work with Huawei will be the most competitive in the 5G era. And countries that choose to work with Huawei will gain an advantage for the next wave of growth in the digital economy."

Guo added, "The easiest way to bring down a fortress is to attack it from within. And the easiest way to reinforce it is from outside. Moving forward, we will do everything we can to shake off outside distractions, improve management, and make progress towards our strategic goals. We will continue to strengthen operational compliance, ensure business continuity and sustainability, and cultivate an open ecosystem where all players collaborate and prosper together. In addition, we will continue our organisational transformation to inspire greater passion and vitality across the organisation."

The Rotating Chairman leads the Board of Directors and its Executive Committee while in office.

Liang Hua, Chairman of the Board, also alluded to challenges. In the report he said, "The world is changing and we are facing new challenges. But Huawei will stay the course. We will work with our customers and partners to build an ecosystem that thrives on shared success. And we will do our best to push the limits of technology and promote social progress along the way."

In its carrier business, Huawei launched its latest 5G and SoftCOM AI solutions, focusing on making them as simple as possible to use and maintain. 2018 also saw ongoing innovation in domains like premium home broadband and the Internet of Things (IoT), helping carriers seize new growth opportunities. In 2018, the sales revenue of Huawei's carrier business reached RMB294 billion, roughly the same as the year prior.

In its enterprise business, Huawei continued providing cloud, big data, artificial intelligence (AI), and IoT solutions, as well as a range of products for data centres, all-flash storage, and Wi-Fi. By integrating these technologies into its digital platform, Huawei has facilitated the construction of smart cities, safe cities, and smart campuses, and has helped drive the digital transformation of its customers in the finance, transportation, and energy sectors. In 2018, sales revenues for Huawei's enterprise business reached RMB74.4 billion, up 23.8% year-on-year.

In its cloud business - which comes under the enterprise business - Huawei launched 160 cloud services and 140 solutions, and worked with its partners to serve customers worldwide with 40 availability zones across 23 regions. Huawei now has more than 6,000 partners for cloud, and is actively exploring the use of its AI services in more than 200 projects across 10 major industries.

In its consumer business, Huawei further increased its share of the global smartphone market and has further enhanced the positioning of its high-end devices. It has also made major breakthroughs in building an intelligent ecosystem for all user scenarios. In 2018, sales revenue of the consumer business group reached RMB348.9 billion, up 45.1% year-on-year.

In 2018, Huawei invested 14.1% of its sales revenue (RMB101.5 billion) in research and development (R&D). According to official data released by the World Intellectual Property Organization (WIPO), Huawei filed 5,405 patent applications to WIPO in 2018, ranking 1st among all companies globally. As of December 31, 2018, Huawei holds 87,805 patents. 

When it comes to 5G, which the company began researching over 10 years ago, Huawei has declared 2,570 5G essential patent families to ETSI. An example of the unique value that the company provides is proprietary core technology that increases the bandwidth of microwave transmission from 1 Gbps to 20 Gbps. "In places where fibre is too difficult or expensive to deploy, we can use microwave solutions for ultra-broadband backhaul. This will make 5G site deployment faster and cheaper, while ensuring the best possible performance," Guo noted in the report.

"Looking ahead, we will continue to invest heavily in R&D to build the simplest possible networks; we will handle the complicated parts, and leave our customers with simplicity. For standalone 5G, we will work hard to build the simplest network architecture, the simplest sites, and the simplest transaction models. We will make operations and maintenance easier. We will also develop the most secure systems, ensuring the highest levels of network resilience and compliance with the General Data Protection Regulation (GDPR)."

As of February 28, 2019, Huawei has signed more than 30 5G commercial contracts with leading global carriers and have shipped more than 40,000 5G sites to different markets around the world.

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*All RMB figures in the Annual Report were converted into US$ using the closing rate at the end of 2018 of US$1 = RMB6.8561

**Growth rates are calculated based on the RMB figures.