Huawei to make ‘survival 1st priority’ after 2019 sales fall short

BEIJING: Chinese telecommunications giant Huawei said Tuesday that “survival” was its first priority after announcing 2019 sales were expected to fall short of projections as a result of US sanctions.

Chairman Eric Xu said Huawei – banned from working with American firms over national security fears – estimates sales revenue will reach 850 billion yuan for 2019 (US$121 billion) – up roughly 18% from the previous year, but much lower than initially expected.

In January this year, the company forecast sales revenue of US$125 billion.

In a New Year’s message addressed to employees, Xu said the US government was in the midst of a “strategic and long-term” campaign against the company that would create a “challenging environment for Huawei to survive and thrive”.

“Survival will be our first priority” in 2020, said Xu, the current chairman under the company’s rotating leadership scheme.

He said Huawei would need to “go all out” to build up its mobile services ecosystem – its answer to the Google apps and services – to “ensure that we can keep selling our smartphones in overseas markets”.

While telecom experts consider Huawei a global leader in 5G equipment – in terms of both technology and price – the company has faced obstacles and suspicion from the US and other foreign nations wary of its close relationship with the Chinese government.

US intelligence chiefs state flatly that Huawei cannot be trusted and its equipment is a threat to national security – an accusation the company has dismissed.

Founded in 1987 by former People’s Liberation Army engineer Ren Zhengfei, Huawei was dragged into the spotlight a year ago when Ren’s daughter, senior Huawei executive Meng Wanzhou, was arrested in Canada at the request of the United States.

Washington wants to put her on trial for allegedly lying to banks about violating Iran sanctions.

The backlash against Huawei has only grown since Meng’s arrest.

Washington has banned US companies from selling equipment to Huawei, locking out the smartphone giant from access to Google’s Android operating system.

European telecommunications operators including Norway’s Telenor and Sweden’s Telia have also passed over Huawei as a supplier for their 5G networks as intelligence agencies warned against working with them.

Australia and Japan have meanwhile taken steps to block or tightly restrict the firm’s participation in their rollouts of 5G networks. Earlier this month, Prime Minister Boris Johnson also strongly hinted that Britain would follow suit.

Chinese law requires individuals and organisations to assist and cooperate with national intelligence efforts.

Xu also said cybersecurity and user privacy were at the “absolute top” of Huawei’s agenda, and that the company would “continue to adhere to all related laws and regulations in the markets where we operate”.