Huawei is unable to cope with large European mergers: report

According to one of the firm's deputy chairmans, the idea of taking over large telecoms firms is outside of what Huawei can cope with.

cred cnet

When tapping into large markets, many companies consider the acquisition and merger of players already in the game to bolster their position and marketshare. However, for Huawei, integration issues will prevent this from happening for large takeovers in Europe.

As reported by German publication Welt am Sonntag, the Chinese telecoms network infrastructure provider is not planning any large mergers or acquisitions, as the firm feels unable to integrate them properly.

In an interview with the publication, Deputy Chairman Guo Ping -- one of three rotating the job of acting CEO -- said that buying one of the large players in the European sector of the market, such as Nokia or Alcatel-Lucent, would be extremely difficult. Guo said:

"We have not yet made major acquisitions, because we believe that our integration capabilities are not yet sufficient for this. A takeover is easy, integration is the difficulty afterwards. Smaller companies we have acquired."

The 47 year-old commented that while Huawei is "open minded" and likes to co-operate with other companies, the mobile phone market is by nature dynamic -- and the company is yet to learn the ropes in direct customer service, which may be harming the firm's profit lines. In addition, the chairman said that Huawei is yet to make its brand known in Europe -- but "all providers benefit" from the globalization of products. After being uncermoniously kicked out U.S. markets due to security worries, the European sector now is an attractive expansion from China.

When asked whether the purchase of Nokia by Huawei partner Microsoft is a problem -- now the Redmond giant is technically a competitor -- Guo said that Microsoft's purchase was designed to strengthen the Windows Phone brand, but by offering both Android and Microsoft-based mobile phones, the Chinese company "leaves the choice to the customer."

Guo also rejected accusations that the Chinese telecoms equipment maker has been "dumping" goods in to the European market in order to artificially foster low prices. In May, the European Commission accused Huawei and ZTE of "price dumping" to freeze out European competitors , and Chinese state support -- resulting in cheap capital -- creates a "distorted playing field" which hurts local firms.

However, the firm's deputy chairman said that Huawei was only able to "take foot" in Europe as "we have better technology and more powerful than the competitors," and the company is not successful because of prices, but rather because of innovation.

When asked about the future of Huawei, Guo said the 'Internet of Things' is an interesting concept, and as the Chinese firm's core business is "to enable people to connect with each other," wearable technology and connected devices are possible areas for future research and development.

In an interview with ZDNet , Zhou Yuefang, executive vice president and chief operating officer of Huawei's LTE business unit and mobile broadband technologies said 5G networking could be possible by 2020, if governments release the airwaves necessary. The firm says 5G mobile broadband could reach speeds of up to 10 gigabytes, roughly 100 times than the best 4G speeds available.