Huawei cashes in on NZ telco investment

Chinese telecommunications equipment vendor Huawei has boosted its New Zealand revenue by more than 500% as a result of unbundling and mobile network investment.

Huawei, which manufactures among other things the DSLAMs that can be used to unbundle the local loop and the mobile network gear in use mobile start-up by 2degrees, has seen its local revenue grow from slightly over $3 million for the year ended December 2007 to $16.3 million in 2008.

Vodafone is one significant customer for Huawei's DSLAM units. ISP Orcon's parent, Kordia, is a partner of Huawei in some Asian telecommunications projects.

However, results for international companies from the Companies Office need to be treated with caution as some of these companies do not record all of their local sales as local revenue, instead paying local subsidiaries sales commissions or similar. 2degrees' deal with Huawei alone is, by most reports, worth considerably more than the figures lodged with the Companies Office.

The revenue boost has also seen the company move into profit, according to statements.

In 2007 Huawei made a net loss of $245, 834 while in 2008 that became a profit of $171,246. Gross profit grew from $74, 529 to $3.7 million.

Internationally, Huawei has been cutting a swathe through the telecommunications and network equipment manufacturing business.

The company became the third-biggest seller of mobile infrastructure in the world in the first quarter of the year, expanding its sales both inside and outside of China.

It displaced Alcatel-Lucent to take its place behind global leader Ericsson and Nokia Siemens Networks in quarterly revenue, according to market research company Dell'Oro Group.

Huawei has had its setbacks, however. In March last year, it failed in a bid to buy 3Com because of US government security concerns.