Chairman Eric Xu warns that hit from US sanctions means telecoms firm must ‘go all out’ to maintain sales

This article is more than 8 months old

This article is more than 8 months old

The embattled Chinese telecommunications company Huawei says “survival” is its first priority after announcing sales were hit hard by a boycott from western countries.

Eric Xu, the company’s chairman, said estimated sales revenue would reach 850bn yuan for 2019 (US$121bn) - up roughly 18% from the previous year, but much lower than initially expected.

In January this year, the company, which was banned from working with American firms over national security fears, 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, who holds the chairmanship under the company’s rotating leadership scheme.

Huawei would need to “go all out” to build up its mobile services ecosystem – its answer to 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 say 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 company 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, the UK government 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”.



