China's Huawei criticizes US security complaints

Published on NewsOK Modified: January 21, 2013 at 2:50 am •  Published: January 21, 2013

In October, a U.S. congressional panel recommended phone carriers avoid doing business with it or its smaller Chinese rival, ZTE Corp. Beijing rejected the report as false and an effort to block Chinese companies from the U.S. market.

In Australia, Huawei suffered a setback in 2011 when the government barred it from bidding to work on a national broadband network.

The U.S. and Australian actions highlight concern about Beijing's cyber warfare efforts, a spate of hacking attempts aimed at Western companies and the role of Chinese equipment providers, which are expanding abroad.

Huawei issued a pledge last year not to cooperate with spying.

Its financial rebound came as ZTE warned Sunday it is likely to report a loss for 2012 of 2.5 billion yuan to 2.9 billion yuan ($400 million to 460 million) due to thinner margins on contracts in Africa, South America, China and elsewhere in Asia.

Huawei says it serves 45 of the world's 50 biggest telecoms carriers. The company has 140,000 employees and research and development centers in Europe, Silicon Valley and elsewhere. Meng said R-and-D spending last year rose 26 percent to 29.9 billion yuan ($4.7 billion).

Last year, only one-third of sales came from its home China market, according to Meng. Europe, the Middle East and Africa accounted for 35 percent of sales, while 17 percent of sales were in other Asia-Pacific markets and 15 percent from the Americas.

Meng said Huawei paid 12.5 billion yuan ($1.9 billion) in employee bonuses last year but said some top executives received no bonus because they failed to meet personal performance targets. She gave no other details.

Major carriers need to keep making long-term investments and are forecast to increase spending by about 5 percent this year, Meng said. She said that should help to insulate Huawei from swings in the global economy.

"It's not as if people stop talking on the phone because the economy is weaker," Meng said. "We will not be influenced too much by the economic downturn in our industry."

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Huawei Technologies Ltd.: www.huawei.com