Huawei to set up $500m plant in India

[Martian2]

Huawei India

Huawei S7 tablet

Huawei Android smartphone

Huawei to set up $500m plant - The Times of India

"Huawei to set up $500m plant
Shalini Singh, TNN, Sep 20, 2010, 01.12am IST

NEW DELHI: Chinese telecom equipment manufacturer Huawei has tipped the telecom equipment security debate strongly in its favor by deciding to set up a local manufacturing base in Chennai with an investment of $500 million. This will be the first large investment in telecom manufacturing since telecom minister Dayanidhi Maran left office as telecom minister in May 2007.

Confirming the development, A Sethuraman, executive director, Huawei India, told TOI that this multi-product facility, which is to be constructed across an area of 30,000 sq ft near Sriperumbudur will become operational before the end of December. According to him, the investment will be staggered over the next 5 years.

Tamil Nadu is often called India's Shenzen after Maran attracted a host of telecom manufacturing investments to the state from 2005 onwards, including Nokia, Ericsson, LG, Sony Ericsson, Motorola, Alcatel Lucent, Nortel and others.

Huawei already has an R&D centre in India which is its biggest outside China, employing 2,000 people. Its India operations have been drawing overall investments of $150 million/year over the past decade. According to the company, it has a total employee base of 6,000 people of which 95% are Indians, while creating indirect employment for 20,000 additional people through its partner ecosystem.

Huawei sells equipment in over 100 countries and claims to serve 46 of the world's top 50 telecom operators. Its global turnover in 2009 was $30 billion of which India sales accounted for roughly 7%. Huawei's turnover for 2010 is projected to hit $36 billion, though India failed to generate any significant contracts until just a month ago owing to home ministry fears that Chinese equipment makers were placing malaware and spyware in their equipment. While all foreign telecom equipment orders were practically suspended over these concerns, Chinese firms faced the real threat of an outright ban, despite the fact that most of India's telecom operators already use Chinese equipment.

On August 3, the ToI had reported that Huawei had turned this threat into a huge opportunity by becoming the first firm to concede to the home ministry's demand to share its source codes with them. Apart from its inherent price advantage, this helped Huawei score heavily against its competitors who refuse to share their source codes.

Huawei's decision to manufacture locally will give it a further edge as it is aimed at checkmating not only its big European and US competitors but also removing any shadow boxing opportunities for India's security agencies. With local manufacturing and investments, the government will have greater access to Huawei's manufacturing operations but also much less room for taking refuge in conspiracy theories. This will force the Indian government to now take a clear stand on how it will deal with its security risk perceptions relating to Chinese equipment makers.

"The manufacturing facility will provide a time-to-market advantage to our customers, faster return on investments and future-proofing of technology or removing obsolescence by enabling compatibilities and smoother integration," says Sethuraman."

 

[Abhishek_]

a smart move from the company. this would end the baseless conspiracy theories about malware/hidden codes etc and further promote business to business relations between chinese and indian companies. great decision Huawei

 

[Gentle Typhoon]

How do you pronounce huawei? Hoo-aa-way-ee ?

 

[Martian2]

How do you pronounce huawei? Hoo-aa-way-ee ?

Two syllables. Wha-whey.

 

[prototype]

Good move,I thought this firms have to say good bye to India,but its a really good smart move,now more and more companies will follow in,actually India's stringent policies turned into a blessing for us also,more manufacturing base,more employment:

 

[RobbieS]

Two syllables. Wha-whey.

Really? Is that how its pronounced? 99% of the people I have heard have got it all wrong then.

 

[Spring Onion]

a smart move from the company. this would end the baseless conspiracy theories about malware/hidden codes etc and further promote business to business relations between chinese and indian companies. great decision Huawei

The conspiracy theories were concocted by Indians and thus were having some phudaa with Huawei

 

[Martian2]

From the Times of India (i.e. TOI) article, you will note that Huawei was the only company that decided to share its source code with India. Also, Huawei chose to build a humongous manufacturing plant in India. Since no other telecommunications company was willing to do this and Huawei is 33% cheaper than the American or European competition, Huawei could actually have out-waited India (e.g. India is only 7% of revenue at maximum; see TOI article).

And yet, Huawei chose to unnecessarily concede its trade secrets and manufacturing know-how. How do we explain this? It turns out that Chinese multinationals behave an awful lot like American multinationals. They focus on short-term profits and consciously ignore the long-term competitive threat. Will India eat Huawei's lunch in 15 years? Possibly. The cycle continues (e.g. America ate Europe's lunch; China ate America's lunch; oh well, I guess it's India's turn).

C'est la vie.

----------

RobbieS, Huawei is split into Hua-wei. Hua=whaa and wei=whey. Hence, wha-whey.
If mom doesn't know how to speak Mandarin properly then I'm in trouble.

 

[humanfirst]

The conspiracy theories were concocted by Indians and thus were having some phudaa with Huawei

 

[mike05]

To be fair I think Huawei knows the risk and consequences should it decide to pursue such an endeavor. Previously in the debate when the Govt of India banned China's telecommunication devices I advocated that the GOI should implement a shared development type deal instead of an outright ban and its good to see thats the path taken in this case.

 

[RobbieS]

From the Times of India (i.e. TOI) article, you will note that Huawei was the only company that decided to share its source code with India. Also, Huawei chose to build a humongous manufacturing plant in India. Since no other telecommunications company was willing to do this and Huawei is 33% cheaper than the American or European competition, Huawei could actually have out-waited India (e.g. India is only 7% of revenue at maximum; see TOI article).

And yet, Huawei chose to unnecessarily concede its trade secrets and manufacturing know-how. How do we explain this? It turns out that Chinese multinationals behave an awful lot like American multinationals. They focus on short-term profits and consciously ignore the long-term competitive threat. Will India eat Huawei's lunch in 15 years? Possibly. The cycle continues (e.g. America ate Europe's lunch; China ate America's lunch; oh well, I guess it's India's turn).

C'est la vie.

I think its more to do with potential Huawei knows the tremendous opportunity it has in India's exploding telecom sector. If it gains a foothold in the country, that 7% is going to double or triple in 3-5 years.

 

[Martian2]

I think its more to do with potential Huawei knows the tremendous opportunity it has in India's exploding telecom sector. If it gains a foothold in the country, that 7% is going to double or triple in 3-5 years.

Good point. I didn't think of that. As you say, Huawei's market share could increase. Okay, maybe they're not dummies. The rewards may justify the risk.

 

[RobbieS]

To be fair I think Huawei knows the risk and consequences should it decide to pursue such an endeavor. Previously in the debate when the Govt of India banned China's telecommunication devices I advocated that the GOI should implement a shared development type deal instead of an outright ban and its good to see thats the path taken in this case.

Agree with that. It was really stupid of GoI to ban Chinese firms. There are other ways of ensuring that data integrity exists. And you cant talk about being friends with China and ban their companies at the same time. That is hollow speak.

I think it was more out of pressure from domestic and Western telecom lobby. Companies like Bharti, Nokia, Motorola and Siemens are currently the leaders in the space and they dont want Huawei to capture market share at their cost. And Huawei and ZTE with their low costs and comparable quality are very much going to do just that.

 

[Nomenclature]

From the Times of India (i.e. TOI) article, you will note that Huawei was the only company that decided to share its source code with India. Also, Huawei chose to build a humongous manufacturing plant in India. Since no other telecommunications company was willing to do this and Huawei is 33% cheaper than the American or European competition, Huawei could actually have out-waited India (e.g. India is only 7% of revenue at maximum; see TOI article).

And yet, Huawei chose to unnecessarily concede its trade secrets and manufacturing know-how. How do we explain this? It turns out that Chinese multinationals behave an awful lot like American multinationals. They focus on short-term profits and consciously ignore the long-term competitive threat. Will India eat Huawei's lunch in 15 years? Possibly. The cycle continues (e.g. America ate Europe's lunch; China ate America's lunch; oh well, I guess it's India's turn).

C'est la vie.

----------

RobbieS, Huawei is split into Hua-wei. Hua=whaa and wei=whey. Hence, wha-whey.
If mom doesn't know how to speak Mandarin properly then I'm in trouble.

Sharing the codes with the Indian government will also alleviate any security concerns other countries may have. This source-sharing program may eventually lead to something like Microsoft's Government Security Program.

I'm not that concerned with security of codes sharing, if Huawei decides to share codes I'm sure they'll take necessary precautions. Also there's a whole load of codes involved, the figure I've heard is ten million+ lines for more complicated equipments. I think Huawei has nearly 30,000 programmers working full time (Huawei has 35,000+ R&D personnel and I've read 80% of them works on software), even if some non-government actors get their hands on the source code when they finally understand it Huawei will already move to another generation of products.

Anyway the ball is now at Indian government and Western providers' court, it's interesting to see whether Western companies will be willing to share the codes with the Indian government.

 

[prototype]

^^now they will b forced to,otherwise lose the world's fastest growing telecom market to a single company to exert its monopoly,the last thing the western companies will want