Chinese aggression

Located in the same building as the Leela Palace, Bangalore’s most expensive luxury hotel, the R&D offices of Huawei India aim to send a clear message to the market.

The $18-billion (Rs 77,400-crore) Chinese telecom equipment giant is trying to leave its early years in India (when it was prohibited from applying for contracts on security grounds) behind and is instead trying to compete on an even footing with its western rivals, including market leader Cisco, Nortel and Juniper.

Over the last couple of years, Huawei has managed to make a strong headway in the booming Indian market, notching up revenues of $600 million (Rs 2,580 crore) for its domestic business, with plans to double that figure to $1.2 billion (Rs 5,160 crore) in 12 months. Huawei India has relied on the booming mobile market in India for growth. “We have bagged clients including Bharti Airtel, Reliance and BSNL,” says Michael Lin, Director-Strategy & Marketing, Huawei Telecommunications India.

Besides the existing mobile phone market, Huawei officials are leaning heavily on the imminent announcement of 3G licences in India to fuel the company’s growth. “We expect the Indian market to have at least 20 million 3G subscribers in a couple of years and we’re talking to many applicants to use our products,” Lin points out. While arch rival Cisco is looking to handhold the growth of the Indian broadband market and seed its growth, Huawei believes that market may be undercooked.

“Broadband infrastructure in India is still in its infancy and even mobile broadband is non-existent,” Lin argues. Industry analysts say that Huawei continues to be a price warrior in this market and is, therefore, ideally placed to compete for large government tenders. Even if true, that’s likely to change. “We have filed for over 200 patents from our Bangalore R&D centre and plan to increase our headcount from 1,200 people to around 2,000 next year,” says George Huang, Chief Operating Officer, Huawei Technologies. Rivals had better not underestimate the Chinese dragon.

—Rahul Sachitanand