Huawei to invest $2 billion in India; set up global R&D centre

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Despite uncertainties in the telecom sector, Chinese equipment maker Huawei will invest USD 2 billion over the next four years in India as it looks to aggressively market consumer devices and set up global R&D centre in the country.

The company, which clocked USD 1.5 billion in revenues from India in 2011-12, is also betting big on the roll out of 4G LTE services in India and is targeting more than 50 per cent share of the contracts coming in.

"2011 was a good year for Huawei because our revenue in India increased about 20 per cent... Last year, we began building a new R&D centre in Bangalore, which will house more than 5,000 people. From 2011, the plan is to invest USD two billion in five years in india," Huawei India chief executive officer Cai Liqun said.

This includes the R&D centre, manufacturing and marketing among others, he added. The company began work on setting up a research and development centre in Bangalore last year, which is expected to house more than 5,000 professionals.

It is investing USD 150 million in the facility, which is expected to become operational from June 2013.

Besides, it also has a global service resource centre (GSRC) in Bengaluru along with a global network operations centre (GNOC), which is its largest such centre outside of China.

These centres cater to its clients across 140 countries. "We are also planning to set up a global technology centre (GTEC) along with the others (existing centres) in Bangalore maybe this year or the next (year). This Centre will focus on providing technical support to clients globally," Liqun said.

He added that GTEC will handle technical issues of customers globally but declined to comment on the number of people that would be hired.

"We have GTECs in China, but this will be first outside china. It is under discussion. Indians have language advantage as well as technology, that is what we want to capitalise on through this centre," Liqun said.

Of the company's USD 1.5 billion Indian revenues, USD 1.2 billion was contributed by its network business driven by 3G deployment and network expansion by operators, while the remaining USD 300 million came from devices like handsets, dongles and set top boxes.

"I think 2012 is a tough year for the whole telecom industry in India because the policy is not clear. Operators are waiting for licences. This period will see no major investment but after all this is solved, we are confident of the Indian market," Liqun said.

Asked about the targeted revenue for 2012-13, Liqun declined to comment but added, "we are in discussion with all players...this year, we are looking at more than 50 per cent of all LTE contracts coming to us".

The company has already deployed 4G LTE network for telecom major Bharti Airtel in Bengaluru. Huawei, which has a low single-digit market share in the mobile phones segment in the country, is also looking at ramping up its presence in the category.

"In three-five years, we want to become one of the top 3-4 players in the Android smartphone space," Huawei vice-president (Corporate Media Affairs) Scott Sykes said.

Globally, it is targeting sales of 60 million mobile phones this year and is hopeful that its 'Ascend P1' (launched at the Mobile World Congress in Barcelona) will make waves in India.