March 28, 2024

Huawei Springs Back With 33% Rise in Net Profit

BEIJING — Huawei Technologies, one of the largest makers of telecommunications equipment in the world, bounced back from a disappointing 2011 with a 33 percent rise in net profit for 2012 and forecast stronger revenue growth, buoyed by smartphone sales and cloud computing.

Huawei’s chief financial officer, Cathy Meng, the daughter of the company’s founder, Ren Zhengfei, denied that U.S. security concerns would hamper the privately held company’s growth and said Monday that it would keep “an open mind” about a possible stock market listing.

“Cloud computing is a huge sector in the next five years,” Ms. Meng told a results presentation. “In the telecom industry, we are expecting a 5 percent increase in capital investments. Smartphone penetration is still way too low and there is a lot of room for growth. So these three areas will create a lot of opportunities for us.”

Huawei, which ranks behind only Ericsson of Sweden in telecommunications equipment, reported an unaudited net profit of 15.4 billion renminbi, or $2.5 billion, up from 11.6 billion renminbi in 2011, as new telecommunications projects and smartphones increased sales.

Revenue for the year rose 8 percent to 220.2 billion renminbi.

The results were in line with company guidance at the start of the year and came a day after ZTE, its rival, warned of a net loss of as much as 2.9 billion renminbi for 2012.

Huawei is making gains in the enterprise business, which sells networking equipment like routers and switches and has up to now been dominated by Cisco Systems.

Huawei, founded in 1987 by Mr. Ren, a former Chinese military officer, is known for aggressively gaining sales in the telecommunications equipment sector by edging out rivals like Alcatel-Lucent, Nokia Siemens Networks and ZTE.

While Huawei has increased sales and gained market share in Europe, Africa and Asia, it has also run into obstacles in countries including the United States and Australia because of national security and cyberespionage concerns.

The company has been barred from bidding for the rollout of a national broadband network in Australia, faces exclusion from the government network in Canada and is not allowed to sell telecommunications equipment to U.S. carriers.

Article source: http://www.nytimes.com/2013/01/22/technology/huawei-springs-back-with-33-rise-in-net-profit.html?partner=rss&emc=rss

China Mobile Executive Sentenced to Death Over Bribes

SHANGHAI — A former executive at China Mobile, one of this country’s biggest state-owned telecommunications companies, was sentenced to death with a two-year reprieve Friday for accepting bribes, according to Xinhua, the state-run news agency.

Zhang Chunjiang, the former vice chairman of China Mobile, the world’s largest mobile phone operator by subscribers, was charged with accepting over $1.15 million in bribes while working at a series of state-run telecom companies between 1994 and 2009, when he was removed from his post.

The sentence, which was handed down by a court in north China’s Hebei Province, is the latest development in an unfolding corruption investigation into this country’s powerful telecom oligopoly.

While state executives and government officials are regularly arrested on corruption charges, only a handful have received the death penalty in recent years. Four years ago, the head of China’s Food and Drug Administration was executed for corruption and failing to protect consumers.

The former chairman of Sinopec, the Chinese oil giant, was also sentenced to death with a two year reprieve for accepting millions of dollars in bribes. And this week, two vice mayors in China were executed for accepting millions of dollars worth of bribes.

Beijing is in the midst of a major corruption sweep ahead of a leadership change expected next year. In some cases, analysts say those charged with corruption may be targeted because of their relationships with high-ranking politicians who are engaged in power struggles.

Recently, prosecutors have focused their attention on the telecom industry. At least seven other executives from China Mobile are under investigation in corruption cases, according to the nation’s state-run news media. And investigators are also looking into the role of several prominent Chinese businessmen, including Zeng Liqing, one of the founders of Tencent, a top Chinese Internet company, according to Caixin magazine, one of the nation’s most respected publications.

State-run news media that said Mr. Zhang, the 53-year-old former China Mobile executive, confessed to his crimes and so was given the death penalty with a two-year reprieve, which means that with good behavior his sentence could be commuted to life in prison.

Xinhua said Mr. Zhang took the bribes while working as deputy director of the Liaoning Provincial Postal administration, and also while working as general manager of China Netcom Group and party chief and deputy general manager of China Mobile.

Article source: http://feeds.nytimes.com/click.phdo?i=2553f8291d1914abc7aee21819556410