Lose-lose US sanctions apply brakes to Huawei’s 2020 growth

Bans on Huawei products in infrastructures around the world begin to affect its bottom line, but comms technology provider shows growth and reaffirms commitment to creating greater value for customers and society in the face of adversity

With the utmost pressure applied to the company by a number of government bans on the use of its technology in national communications infrastructures, Huawei’s latest annual results have shown that although its growth slowed, business performance was largely in line with the forecast, with annual rises in profits and revenues.

In its 2020 annual report, the company revealed sales revenue for the year rounded off at US$136.7bn, up 3.8% year-on-year, and net profit reached US$9.9bn, up 3.2% year-on-year. The report also showed that its carrier business continued to ensure the stable operations of more than 1,500 networks across some 170 countries and regions – networks that, Huawei noted, had helped support remote working, online learning and online shopping throughout Covid-19 lockdowns.

“Over the past year we’ve held strong in the face of adversity,” commented Huawei’s rotating chairman Ken Hu (pictured above). “We’ve kept innovating to create value for our customers, to help fight the pandemic, and to support both economic recovery and social progress around the world. We also took this opportunity to further enhance our operations, leading to a performance that was largely in line with forecast.”

Huawei added that over the past year, its enterprise business had stepped up efforts to develop “innovative” scenario-based solutions for different industries and create a digital ecosystem. During the pandemic, Huawei said it provided technical expertise and solutions that were vital in the fight against the virus, such as an artificial intelligence (AI)-assisted diagnostic solution based on Huawei Cloud that helped hospitals the world over reduce the burden on their medical infrastructure. Huawei also worked with partners to launch cloud-based online learning platforms for more than 50 million primary and secondary school students.

“Over the past year we’ve held strong in the face of adversity. We’ve kept innovating to create value for our customers, to help fight the pandemic, and to support both economic recovery and social progress around the world”
Ken Hu, Huawei

Looking at other highlights throughout the year, the firm said it had worked with carriers around the world to provide “superior” connected experiences and had moved forward with more than 3,000 5G innovation projects in over 20 industries, including coal mining, steel production, ports and manufacturing.

In addition, it noted the roll-out of the HarmonyOS mobile operating system and the Huawei Mobile Services (HMS) ecosystem. Its consumer business also moved forward with the AI Life strategy (1 + 8 + N) to provide consumers with an intelligent experience across all devices and scenarios, focusing on smart office, fitness and health, smart home, travel and entertainment.

Yet overshadowing these achievements were the various bans on Huawei technology and services, which Hu described as a lose-lose for all parties. These were first implemented by the previous Trump government – and show no signs of being repealed by the Biden administration – and then replicated by countries such as the UK in mid-2020. Even as it made its decision, the UK government conceded that there would be a heavy price to pay, principally by the country’s mobile operators.

“We will continue to work closely with our customers and partners to support social progress, economic growth and sustainable development,” added Huawei vice-president Victor Zhang. “A key reason Huawei has maintained growth and profitability is that many countries trust us as a partner to deliver next-generation connectivity for their citizens – connectivity that delivers crucial economic and social benefits. After 20 years in the UK, we remain committed to our vision of a fully connected and intelligent world for every home, person and organisation.”

A November 2020 report from analyst firm Oxford Economics calculated that Huawei was responsible for a £3.3bn contribution to UK GDP and supported 51,000 jobs through its economic activity.

Going forward, and bans notwithstanding, Huawei was optimistic that it would continue to cash in with 5G. Indeed, at the end of 2020, Ryan Ding, Huawei executive director and president of Huawei’s carrier business group, said the coming decade would be a golden age for 5G’s progress around the world, and that the whole industry must have faith in the technology, building the best 5G networks and making the most of them for shared value.

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