TBR

T E C H N O L O G Y B U S I N E S S R ES E AR C H , I N C .

NETWORK BUSINESS QUARTERLYSM

Huawei
SECOND CALENDAR QUARTER 2010

TBR OUTLOOK - POSITIVE TBR SCORE (0-10 SCALE)

 4.34 11 Merrill Drive

Second Fiscal Quarter 2010 Ended June 30, 2010 Hampton, NH 03842
Publish Date: September 15, 2010 Tel: 603.929.1166
Author: Christopher Antlitz ([email protected]), NBQ Research Analyst www.tbri.com
Content Editor: John Byrne, NBQ Director
© 2010 Technology Business Research, Inc.
Huawei – Calendar 2Q10 Report
TBR
Table of Contents

Company Analysis Company Data Models

Executive Summary 3 Income Statement 25
Strategy Overview 8 Balance Sheet 26
Corporate SWOT Analysis 11 Operating Segment Revenue Model 27
Financial Model Strategy 14 Geographic Model 28
Go-to-Market & Product Strategies 17 Operating Expense Model 29
Alliance & Acquisition Strategies 18 Forecast Model 30
Geographic Analysis 19 Financial Graphs 31
Resource Management Strategy 21 Go-to-Market & Resource Mgmt. Graphs 34
Future Outlook 22 Strategic Alliance and Partnerships Table 35
Appendix 25 Product Announcement Table 36
Customer Deals Table 38
Facilities Table 43
Management Table 45

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the recipient. Contact Technology Business Research, Inc. for permission to reproduce: 11 Merrill Drive, Hampton, NH 03842, P: 603.929.1166, F: 603.926.9801, Web: www.tbri.com

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Huawei – Calendar 2Q10 Report Executive Summary
TBR
Despite progress in India, Huawei still has much work to do
to allay government fears in the U.S. and elsewhere
• After nearly a year of political gridlock in India, Huawei and its rivals started receiving
security clearances to sell their network equipment in the country. The timing of the
approvals is crucial, as the May auction of 3G licenses by Indian authorities will lead
In September, to a flurry of deployment activity over the next two years.
Huawei was
• However, in order to get the security clearances all vendors were required to make
cleared to sell
hefty concessions to the Indian government, including providing Indian authorities
equipment
1 in India
access to engineering plans, source code and supply chain information.
after agreeing to
make hefty • TBR believes the added cost of complying with Indian regulations will erode some of
concessions the cost differential inherent in Huawei’s products, effectively lessening the company’s
cost advantage over incumbent vendors’ equipment. Despite the additional costs,
Huawei should still be positioned strongly to gain long-term client relationships and
potentially lucrative equipment and services deals in 3G deployments.
• Huawei does a relatively small amount of business in North America ($408 million, or
1.9% of total sales in 2009), but is looking to expand as quickly as possible and is
taking a long-term approach in the region.
Huawei is • Throughout 1H10, Huawei took steps to boost investment in the United States and
1 in its U.S.
investing Canada, opening a new R&D facility in Ottawa and aligning with law and consulting
sales and R&D firms to improve the company’s image and prospects.
presence and is • Huawei hopes its partnership with Amerilink Telecom, a start-up headed by former
taking a holistic Sprint employees, will help the vendor land lucrative contracts with Tier 1 operators
approach to (especially Sprint); however, any large contract Huawei is selected for must be
improving
1 the approved by the United States government.
company image
• Management is betting that these steps, along with a push toward greater
transparency and cooperation, will soften the U.S. government’s attitude toward
Huawei, making it easier for the company to bid on contracts and possibly engage in
M&A within the sector.
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Huawei – Calendar 2Q10 Report Executive Summary
TBR
TBR believes Huawei is on track to meet and potentially exceed its
20% sales growth target in 2010 as equipment demand recovers
TBR Position:
• TBR estimates 35% of Huawei’s 2010
Huawei likely outperformed incumbents in the revenue will come from China, down from
first half of 2010 as demand for equipment 46.5% in 2009, as a slowdown in Chinese
rebounded in select regions and a continued spending causes the vendor to increase its
focus on operator capex control worked in focus on growth opportunities elsewhere.
Huawei’s favor. • We believe Huawei is exercising its generous
• TBR believes Huawei’s international sales will credit lines with Chinese banks to offer
be strong in 2010, helping offset an expected attractive financing to cash-strapped
slowdown in Chinese spending on equipment operators in developing countries. As such,
following rollout of 3G. TBR estimates Huawei will grow sales faster
• Operators in developed countries are realizing than peers in CALA and Africa, where access
the benefits of Huawei’s solutions, and in some to capital is scarce, especially for large-scale
instances are uprooting longstanding deployments.
relationships with incumbent vendors to do
business with Huawei. TBR HUAWEI REVENUE BY REGION
$28,000 $1,048
Huawei’s Corporate Strategies North
$24,000
• Cooperate with authorities to gain access to key $408 America
$8,646
Revenue in Millions

growth markets, particularly the United States $20,000

$231 $6,500
EMEA

and India. $16,000 $6,040 $1,572

$146 $923 CALA
• Leverage its strong balance sheet to uncover $12,000 $4,399 $3,843 $5,764
$1,539
strategic M&A targets. $8,000 $900
APAC (ex-
$5,743 China)
• Manufacture and bring to market low-cost $4,000
$3,799 $10,147 $9,170
China
smartphones using the popular Android OS to $3,595 $4,518
$0
solidify Huawei’s position as a key smartphone 2007 2008 2009 2010 Est.
vendor in developed regions. SOURCE: TBR ESTIMATES AND HUAWEI

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Huawei – Calendar 2Q10 Report Executive Summary
TBR
Huawei’s SingleRAN platform is widely popular among telcos that are
operating multiple wireless standards and planning to move to LTE
2010
Growth
Segment Key Changes & Drivers Revenue Keep on the Radar
Y/Y
Estimate
• RAN sales will remain strong through
2010 as operators replace existing
base stations with more energy- • Component shortages probably
efficient and multi-mode, LTE-ready affected Huawei’s ability to satisfy
all equipment orders in 1H10,
equipment. $7.7
Wireless 21.7% though the problem will likely ease
• As such, TBR believes Huawei will billion
by the end of this year as
see strong sales of its SingleRAN component suppliers ramp up
solution, which has been particularly production.
popular among mature market
operators.

• SingTel chose to install Huawei’s

$1.8 • IP convergence will remain a key
Fixed NE5000E 1+2 router cluster system in 14.6%
billion driver of fixed spend.
its converged IP backbone network.

• Huawei will benefit from BT’s

decision to increase fiber
• Huawei signed a number of optical
investment by £1 billion ($1.5
transport-related contracts in 1H10, $5.1
Optical 11.0% billion) through 2015, as the
including with PCCW in Singapore, billion
vendor has been a key supplier of
LPTIC in Libya and GlobeNet in Brazil.
optical access and transmission
equipment to BT since 2008.

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Huawei – Calendar 2Q10 Report Executive Summary
TBR
Huawei’s differentiated solutions and early entry into selling
HSPA+ compatible devices stimulated revenue growth in 2010
2010
Growth
Segment Key Changes & Drivers Revenue Keep on the Radar
Y/Y
Estimate
• Operators are stressing
efficiency on a cost per bit
• Demand for Huawei’s routers has been basis, as revenue derived
strong in 1H10 as operators have bulked up from data is growing at a far
Data $2.0 billion 30.9%
their network capacity to deal with rising data slower rate than data usage.
usage. This trend bodes well for sales
of Huawei’s SingleRAN and
backhaul solutions.
• After nearly doubling in revenue 2009, we • Huawei is bulking up its
believe Huawei’s professional services unit services arm to better
continued growing at an abrupt pace in 1H10, compete against
albeit off a small base compared to heavyweights Ericsson,
Service & incumbents. Alcatel-Lucent and Nokia
$4.9 billion 34.5%
Software • Software sales were also strong in 1H10, with Siemens for lucrative
Telefonica deploying Huawei’s SDP across outsourcing contracts;
its global operations, StarHub utilizing however, it will be some time
Huawei’s smartphone signaling solution and before Huawei can undertake
M1 employing Huawei’s IMS solution. a mega-services deal.
• Huawei unveiled a series of Android • The U8800 handset, the
smartphones in 1H10, including the entry- world’s first smartphone
level U1850 Ideos and HSPA+ compatible compatible with HSPA+,
Handset $4.8 billion 13.1%
U8800 in September, which will all help the positions Huawei favorably
vendor take market share from incumbent with the 53 operators globally
smartphone manufacturers. rolling out the HSPA upgrade.

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 Huawei – Calendar 2Q10 Report Executive Summary
TBR
Traction in developed markets is helping Huawei take
market share and grow sales faster than most peers
CALENDAR QUARTER RESULTS
TBR TBR  Company  Average  Standard  TBR SCORING SUMMARY:
2Q09 3Q09 4Q09 1Q10 2Q10
FINANCIAL METRICS Score Figure in Class Deviation/2 Financial Model Strategy: 5.60 5.69 5.66 5.67 5.70
Revenue Growth Year‐to‐Year       6.81 20.1% 0.4% 10.8% Go‐to‐Market & Services Strategies: 1.36 1.41 1.34 3.66 2.36
Revenue/Employee       3.17 $ 229,694 $ 383,966 $       84,460 Resource Management Strategy: 5.09 5.24 5.54 5.14 4.98
Gross Margin       5.49 39.7% 37.1% 5.2% TOTAL AVERAGE TBR SCORE: 4.01 4.11 4.18 4.82 4.34
SG&A as % of Sales       5.02 16.8% 16.8% 2.2%
R&D as % of Sales       6.87 9.2% 13.3% 2.2%
Operating Margin       6.25 11.5% 6.0% 4.4%
Days Cash Outstanding       3.78 70.60 131.53 50.06 Huawei has the weakest days sales
Total Asset Turns       6.71 1.16 0.91 0.15
Current Ratio       3.55 1.48 1.87 0.27 outstanding metric among its peers due to
Debt/Assets       2.84 0.63 0.48 0.07 its liberal credit policies. Huawei regularly
Return on Assets       8.42 14.2% 4.8% 2.7% assumes IOUs from its customers to boost
Return on Equity       9.49 45.6% 11.0% 7.7% sales and encourage investment. We
TOTAL AVERAGE TBR SCORE 5.70 believe this practice could weaken Huawei’s
balance sheet if cash-strapped operators
TBR  Company  Average  Standard  struggle to pay back outstanding debt.
GO‐TO‐MARKET & SERVICES METRICS Score Figure in Class Deviation/2
Mobile Phones       3.67 1.9% 10.6% 6.6%
Days Sales Outstanding       1.04 154.96 78.98 19.19 Key
TOTAL AVERAGE TBR SCORE 2.36 ■ Represents an area where Huawei is
currently challenged versus peers.
TBR  Company  Average  Standard 
RESOURCE MANAGEMENT METRICS Score Figure in Class Deviation/2 ■ Represents an area where Huawei is
Inventory Turns/Year       3.60 6.25 9.40 2.24 outperforming its peers.
Fixed Asset Turns/Year       6.35 19.23 14.33 3.63
TOTAL AVERAGE TBR SCORE 4.98 ■ Represents an area where Huawei is
neither significantly outperforming
nor underperforming its peers.
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Huawei – Calendar 2Q10 Report Strategy Overview
TBR
Huawei will focus on building its business in India and the
United States to attain its sales growth target of 20% in 2010
Key Company Objectives TBR Assessment
• Build on initial success in  Huawei has yet to land an equipment contract with a Tier 1
North America to become a operator in the United States, though the vendor is finding
key supplier to network success among Tier 2 companies.
Overall operators (4Q09)
• Grow business in India by ; With security clearance in hand, Huawei can realize the full
localizing Huawei’s potential of its extensive resources in India, which include a
presence (4Q09) skilled local workforce and domestic manufacturing assets.
 TBR believes Huawei is on track to meet or exceed its sales
• Grow sales 20% in 2010 by
target for 2010, as TBR estimates broad sales growth in all of
Financial focusing on international
Huawei’s operating segments; however, a double dip recession
expansion
in 2H10 could damper Huawei’s momentum.
; Huawei’s LTE contracts are second only to Ericsson, as
• Establish LTE market
operators increasingly opt for the Chinese vendor’s lower-
leadership position (2Q09)
Go-to- priced infrastructure.
Market • Become a leader in carrier-
; Vodafone has become a key reseller of Huawei equipment,
branded handsets and data
offering the vendor’s portable Wi-Fi router, femtocell and
terminals (4Q08)
dongles to its European customers.

R&D and • Establish R&D centers in ; Huawei opened an R&D center in Ottawa in August – the
Delivery strategic cities to leverage vendor’s second R&D facility in North America. This base of
Strategy local talent pools operations in Canada will help Huawei develop closer ties with
its local customers, including BCE, SaskTel and TELUS.

Key: ; Working: Short-term impact expected on bottom / top line : Not working: No major impact or differentiation expected  Too soon to tell
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Huawei – Calendar 2Q10 Report Strategy Overview
TBR
With Chinese infrastructure spending poised to decline from peak levels
in 2009, Huawei is looking to offset the impact with non-domestic sales
TBR Assessment of Huawei’s Strategy: Grow sales 20% in 2010 by focusing on international
expansion

• According to spending projections released by China Mobile, China Unicom and China
Telecom, TBR estimates network spending in China will fall at a double-digit rate through at
least 2012. The spending drop will stem from a slowdown in 3G rollout, tighter monetary policy
and overcapacity. As such, we estimate Huawei’s sales in China will outperform European
rivals, but will still decline roughly 10% in 2010.

India sales will • To meet its 20% sales growth target this year, TBR believes Huawei is redoubling its efforts in
not contribute key international markets to try to offset its decline in domestic sales.
much to growth
in 2010, but
look for the • Excluding India, which will likely provide Huawei with anemic sales growth in 2010 due to red
tape in 1H10, the primary sources of growth for 2010 will be EMEA, CALA and Southeast Asia.
country to add
to Huawei’s top
line in 2011 as • Success with European operators in 1H10 will likely continue through year-end, as Huawei
large-scale 3G tailors its solutions to address operator concerns surrounding capacity expansion, network
rollouts ramp convergence and 4G migration.
up
• TBR believes the wild card that will determine if Huawei meets or misses its sales targets for
2010 rests on how the industrywide component shortage affects Huawei’s ability to meet
orders. Where Ericsson, Nokia Siemens and, to a lesser extent, Alcatel-Lucent all assumed
deferred sales from these supply chain issues, it is unclear to what degree the shortages
affected Huawei, especially given that most of these commodity components are sourced
directly from China.

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Huawei – Calendar 2Q10 Report Strategy Overview
TBR
Huawei is cooperating with authorities in India and the United States
to demonstrate its competency and good intentions
TBR Assessment of Huawei’s Strategy: Embrace openness and lobbying to allay security concerns
and expand businesses in India and United States

• Huawei and close rival ZTE continue to encounter roadblocks in certain regions due to security
concerns. These difficulties are most pronounced in India and the United States, two countries
that happen to be critical investment areas for the telecom infrastructure industry.
• To alleviate security concerns and improve its image, Huawei has become much more open and
shown willingness to work with authorities to facilitate expansion. In India, Huawei has agreed to
rigorous inspections and to relinquish sensitive material about source code, equipment designs
and the company’s ownership structure. Cooperation with the Indian government led to the
Partnering issuance of a security clearance in September, giving Huawei a green light to sell its equipment to
with domestic Indian operators.
firms such as
Amerilink • Despite progress in India, the United States remains a difficult market to penetrate for Huawei,
could be the despite winning several contracts with Tier 2 operators Leap, Cox and Clearwire. Huawei has yet
to secure a contract from a Tier 1 operator in the United States, but has been more diligent and
proverbial key has begun bidding aggressively for large contracts, especially as a supplier to Sprint.
Huawei needs
to unlock • Any major equipment deal with a United States company will have to be cleared by government
opportunities officials. As such, Huawei has contracted with Amerilink Telecom, a start-up run by former Sprint
employees, to act as an equipment distributor and liaison to help the vendor secure business
in the United
among operators in the country. Aside from Amerilink, Huawei is also working closely with law
States firms and independent consultants like former Bush administration adviser on national security
issues John Bellinger, to win approval in the United States.
• By building relationships with domestic operators and supportive firms and agreeing to work with
United States officials in a manner similar to its approach in India, TBR believes that Huawei
improves its chances of freely competing. However, Huawei will likely abstain from pursuing deals
with AT&T and Verizon to avoid the spotlight the vendor has attracted with the potential Sprint
deal.

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 Huawei – Calendar 2Q10 Report Corporate SWOT Analysis
TBR
Huawei remains strong in network equipment, and the vendor
is making progress in its services and software businesses
Strengths Opportunities
• SingleRAN platform is a key • Extensive lines of credit fuels growth in
differentiator for winning contracts in developing markets (4Q09)
developed regions • Use strategic partnerships to build
• Global leader in transport products (2Q09) expertise and enter new markets (2Q09)
• Able to provide vendor-linked financing • Utilize Service Delivery Platform to
through ties to state-run banks in China establish Web 2.0 leadership (4Q08)
• Low operating costs support low-cost • Establish a foothold in the North
pricing strategy American market (2Q08)
• Extensive installed base of Tier 2/3

External
telecom operators in emerging markets
Internal

Weaknesses Threats
• Relatively small managed services • More competitive strategy from NSN and
base others could pressure Huawei in wireless
• Ties to Chinese government could limit network sales (4Q09)
international investment opportunities • Reshuffling of Chinese telecom industry
(4Q07) could dampen Huawei’s growth
• Lacks strong U.S. presence prospects in home market (4Q08)
• Lags in providing end-to-end service • Tighter monetary policy by China could
delivery capability limit Huawei’s domestic growth

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Huawei – Calendar 2Q10 Report Corporate SWOT Analysis
TBR
Since introducing SingleRAN in 2008, Huawei has expanded on the
platform to address data and 4G compatibility, fueling additional sales
Strength: SingleRAN platform a key differentiator for winning contracts in developed regions

• Huawei’s SingleRAN platform has become widely popular among operators. SingleRAN,
which is able to support GSM, UMTS, TD-SCDMA, CDMA, LTE and/or WiMAX
simultaneously, is increasingly being selected for RAN replacement and 4G deployments.

• The solution gives operators an opportunity to consolidate and converge existing RAN
while lowering TCO for the entire network. Huawei believes SingleRAN is 15% more
energy efficient than conventional industry RAN efficiency, adding a compelling reason for
SingleRAN is operators to consider the solution over competitors’ offerings.
helping
Huawei
• Since unveiling the SingleRAN platform in 2008, Huawei has released software upgrades
capture key
to make the BST compatible with 4G standards, further improved the solution’s efficiency,
contracts with
and added the SingleRAN@Broad, which dramatically lowers the cost per bit of sending
operators
wireless data.
using legacy
network
infrastructure • Demand for Huawei SingleRAN primarily stems from operators in developed regions
where using legacy assets adds layers of complexity to their networks. As such, using
SingleRAN allows incumbent operators to cost-effectively tie together existing
infrastructure, effectively simplifying network operation and reducing maintenance cost.

• By the end of 2009, SingleRAN was utilized commercially by over 30 operators

worldwide – a rapidly growing number, as Huawei inked deals with Canadian operators
Wind and SaskTel, and others in 1H10.

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Huawei – Calendar 2Q10 Report Corporate SWOT Analysis
TBR
Despite recent wins with ONO and Maxis Berhad, Huawei still lags
Ericsson, NSN and Alcatel-Lucent in managed services
Weakness: Relatively small managed services base

• Though Huawei reported that sales in its professional services unit nearly doubled in
2009, with managed services growing 120% year-to-year, the vendor continues to lag
Ericsson, Nokia Siemens and Alcatel-Lucent in services scope and size of installed base.

• Outsourcing network operations has become a high-growth area for Ericsson, Nokia
Siemens and Alcatel-Lucent this past decade. Since most originate from operators in
developed regions, are long-term in duration, and provide recurring revenue streams
typically at higher margins than equipment, vendors have jockeyed for these lucrative
Huawei has yet managed services contracts.
to secure a
major
• While Huawei is gaining traction in managed services, as evidenced by recent wins with
outsourcing
Maxis Berhad in Malaysia and ONO in Spain, the vendor remains locked out of mega-
deal, but is
services deals, which have recently been won primarily by Ericsson and Nokia Siemens.
finding success
winning smaller
contracts • Small market wins will not enable Huawei to overtake Ericsson, the industry leader.
Ericsson’s managed services reaches 450 million subscribers, while Huawei serves only
65 million. Larger operators with complex networks and operations spread across
multiple regions will feel the most comfortable selecting leaders in network services,
which makes Ericsson and Nokia Siemens the default vendors of choice.

• Huawei’s professional services division is growing at a much faster pace than its
European rivals, indicating that the Chinese vendor is making progress in winning larger
contracts and bulking up its service offerings to appeal to a wider variety of operators.

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Huawei – Calendar 2Q10 Report Financial Model Strategy
TBR
TBR believes Huawei’s operating margin will contract in 2010, reflecting
heightened S&M efforts to win business in developed markets
Revenue TBR HUAWEI PROFITABILITY AND GROWTH
• TBR estimates Huawei will meet its growth $30,000 60%

target of 20% sales growth in 2010, as select $25,000 50%

regions entered economic recovery and

In Millions USD
$20,000
40%
resumed spending on technology. $15,000
Expense $10,000
30%

• TBR believes Huawei will spend $2.4 billion on $5,000 20%

R&D in 2010, close to the company’s target $0 10%
spend of 10% of total revenue. 2006 2007 2008 2009 2010 Est.
• TBR expects SG&A as a percentage of revenue Total Revenue
Operating Profit
Gross Profit
Year-to-Year Revenue Growth
to comprise nearly 17% of revenue in 2010, as SOURCE: TB R ESTIM A TES A ND HUA WEI
Huawei beefs up advertising and sales
departments to meet growing demand in
developing regions. TBR HUAWEI REVENUE COMPOSITION

Margin 40%

• TBR believes gross margin will rise 10 basis 30%

points from 2009, reflecting a favorable sales 20%

mix skewed toward higher margined products
like smartphones, software and services. 10%

• However, operating margin will likely contract to 0%

11.5% in 2010 as Huawei steps up efforts to 2006 2007 2008 2009 2010 Est.
Wireless Fixed
win business in Western Europe and the United Optical Data
States. Services & Softw are
SOURCE: TB R ESTIM A TES A ND HUA WEI
Handset

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Huawei – Calendar 2Q10 Report Financial Model Strategy
TBR
TBR believes Huawei will see strong growth in all of its
operating segments in 2010, led by Services & Software
Revenue Performance Revenue Drivers
2010 Est. Revenue: $26.2 billion, +20.1% Y/Y
TBR HUAWEI REVENUE BY SEGMENT
$28,000
Handset • TBR believes Huawei will see broad sales growth in
$24,000 Service & all operating segments as operators seek cost
$4,800
Softw are savings in both capex and opex.
Revenue in Millions

$20,000 $4,245 $4,900 Data

$16,000 $3,790
• The Services & Software segment should see the
$3,644 $2,000 Optical
$2,792 $1,527 strongest growth in 2010 as Huawei broadens its
$12,000 $2,106 $5,050
$1,965
$1,265 $4,549 Fixed services portfolio and attracts large telcos, such as
$8,000 $1,200 $3,176 $1,750
$2,190 $1,446 $1,527 Telefonica, to utilize its SDP and multimedia
$1,400 Wireless
$4,000
$3,980 $5,602 $6,328 $7,700 solutions.
$0
2007 2008 2009 2010 Est. 2010 Revenue and Growth Outlook
SOURCE: TBR ESTIMATES AND HUAWEI
• TBR believes Huawei is on track to grow sales 20%
in 2010, aided by solid momentum in developed
TBR HUAWEI 2010 SEGMENT REVENUE GROWTH markets.
$26,500 • Growth is likely in all of Huawei’s operating
Revenue (in $ Millions)

$555
$25,500
$1,256
segments, led by optical, which TBR believes will
$24,500
$473
grow in excess of 50% year-to-year as operators
$23,500 $223
$501
$26,200 boost investment in backhaul and transport to
$22,500 $1,372 mitigate high data usage.
$21,500
$21,821 • With Chinese sales slated to be weaker than prior
$20,500
l
years, TBR believes the continuation of Huawei’s
ue l es
s ed ti ca ta are se
t ue
ev
en ire Fi x Op Da ftw nd ev
en high growth rate hinges on India and the United
R W So Ha t. R
09 & Es States, where growth prospects are abundant but
20 e
rvic 010
Se 2
SOURCE: TB R ESTIM A TES A ND HUA WEI regulatory hurdles loom.
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Huawei – Calendar 2Q10 Report Financial Model Strategy
TBR
TBR estimates Huawei’s costs will grow in line with revenue in 2010
Expense Performance Expense Segments & Strategies
2010 Est. OPEX: $22.6 billion, +20.1% Y/Y
TBR HUAWEI OPERATING EXPENSES
$25,000
$2,400
$20,000
Cost of • TBR estimates cost of revenue will
$1,511
$1,953
$4,400 Revenue comprise 60.3% of sales in 2010 –
In $ Millions

$15,000
$1,284 $3,236
$3,538
$15.8 slightly lower than 2009 due to a
$10,000 $850
$2,350 $15,800 billion favorable product mix.
$10,890 $13,188
$1,502 $7,937
$5,000
$5,424
$0
2006 2007 2008 2009 2010 Est.
• TBR estimates SG&A will grow faster
Cost of Revenue SG&A Research & Development
SG&A than sales as Huawei focuses resources
SOURCE: TB R ESTIM A TES A ND HUA WEI
$4.4 on selling and marketing its solutions to
HUAWEI OPEX AS A PERCENTAGE OF REVENUE
billion non-core markets such as Western
TBR Europe and North America.
70%

60%

50%

40%

30% • TBR believes Huawei will boost R&D

20% R&D spending $862 million, or 22.9%, year-
10% $2.4 to-year, as management feels more
0% billion comfortable investing amid the global
2006 2007 2008 2009 2010 Est. recovery.
Cost of Revenue SG&A Research & Development
SOURCE: TB R ESTIM A TES A ND HUA WEI

16 TBR NETWORK BUSINESS QUARTERLYSM www.tbri.com © 2010 Technology Business Research, Inc.
Huawei – Calendar 2Q10 Report Go-to-Market & Product Strategies
TBR
Huawei’s customizable solutions and mobile devices address
operators’ key priorities, boding well for sales prospects
Telecom Network Infrastructure Application & Software
• Huawei introduced the SingleRAN@Broad solution
in February 2010 to help operators lower the cost of • In 1Q10, Huawei unveiled the iManager U2000 and
transporting mobile data. Huawei claims the solution U2520; tools that will help operators better manage
can reduce the cost per bit of delivering mobile data their OSS functions and optimize their IP networks.
by more than 95% by integrating infrastructure from Huawei is focusing more on software, especially as
multiple wireless standards to work symbiotically. its core customers in China begin to focus attention
With data revenue growing far slower than data on bringing value-added services over their new 3G
volume, we believe Huawei’s SingleRAN@Broad networks to spur revenue growth.
solution addresses a critical need for operators in all • Deployment of Huawei’s IMS and SDP solutions
markets. continued to gain momentum, with Telefonica rolling
• Huawei’s SingleRAN platform has been well out Huawei’s SDP across its global operations in
received, with Wind, SaskTel and Cox August to facilitate the operator’s application
Communications all employing the technology in ambitions.
their next-generation networks.
Professional Services Devices

• Huawei won two multi-year managed services

• Vodafone has become a major reseller of Huawei
contracts with Maxis Berhad in Malaysia and ONO
gear, offering the vendor’s R201 portable Wi-Fi
in Spain, as well as a maintenance deal with
router and femtocells to its European customers.
Telefonica O2 in Germany.
• TBR expects operator uptake of Huawei’s U8800
• The securing of these key deals indicate Huawei is
smartphone will be strong this holiday season, as
moving steadily into Western Europe, challenging
the device is one of few smartphones that is HSPA+
incumbents Ericsson, Alcatel-Lucent and Nokia
compatible.
Siemens on their home turf.

17 TBR NETWORK BUSINESS QUARTERLYSM www.tbri.com © 2010 Technology Business Research, Inc.
Huawei – Calendar 2Q10 Report Alliance & Acquisition Strategies
TBR
Huawei attempted to flex its M&A muscles in the United States, but the
vendor’s bids were rejected over concerns about government intervention
TBR Assessment of Huawei’s Alliance & Acquisition Strategy

• After failing to win Motorola’s Networks business and 2Wire in 2Q10 despite
generous offers, TBR believes Huawei has given up on using acquisitions as a
means of entry into the United States and will instead face its challenges head-on.

• Though Huawei’s offers were higher for the aforementioned businesses, the boards
of both acquired companies opted to disregard Huawei’s bids to avoid regulatory
Forging alliances uncertainty.
may be Huawei’s
best chance at • Huawei’s inability to buy assets in the United States stretches back to February
significantly 2008, when the vendor tried to purchase a minority stake in 3Com alongside Bain
growing its Capital. That proposed deal was met with government scrutiny, prompting Huawei to
presence in the withdraw its bid.
United States

• While the United States government will be hard-pressed to let Huawei obtain
critical assets as a result of national security concerns, TBR believes Huawei will
have a better chance to penetrate the United States by forming strategic alliances
with domestic companies. Taking this approach could give Huawei access to
strategic distribution channels within the country, an opportunity to share R&D
investment and open doors with key customers.

18 TBR NETWORK BUSINESS QUARTERLYSM www.tbri.com © 2010 Technology Business Research, Inc.
Huawei – Calendar 2Q10 Report Geographic Analysis
TBR
Growth in India will partially offset weak sales in China, where total spend
is projected to fall from 2009 peak levels at least through 2012
2010
YTY
Geo Key Deals & Drivers Revenue Keep on the Radar
Growth
Estimate
• TBR estimates absolute capex spend
by incumbent Chinese telcos will fall
• TBR believes sales in China in
16% in 2010 and continue to decline
2010 will decline nearly 10% from $9.2
China –9.6% through 2012 as spending shifts from
2009 reflecting post-peak spending billion
network buildouts to less capital-
on 3G deployments.
intensive services and software
upgrades.

• TBR believes India sales were

weak in 1H10, as heightened • Huawei finally received security
government regulation stifled sales clearance to sell telecom equipment in
APAC (ex- growth. $5.8 India in September. As such, TBR
50.0%
China) • TBR estimates Huawei will billion expects Huawei’s 2H10 sales to India
generate $1.6 billion in revenue will spike from an exceptionally weak
from India in 2010, up 2.4% year- 1H10 as pent-up demand is satisfied.
to-year.

TBR HUAWEI GEOGRAPHIC REVENUE

FISCAL YEAR 2004 2005 2006 2007 2008 2009 2010 Est.
China 73.0% 60.0% 34.7% 28.0% 25.0% 46.5% 35.0%
International 27.0% 40.0% 65.3% 72.0% 75.0% 53.5% 65.0%
SOURCE: TBR ESTIMATES AND HUAWEI

19 TBR NETWORK BUSINESS QUARTERLYSM www.tbri.com © 2010 Technology Business Research, Inc.
Huawei – Calendar 2Q10 Report Geographic Analysis
TBR
TBR believes Huawei made significant inroads in Europe and North
America in 1H10, which will help offset a slowdown in Chinese spend
2010
YTY
Geo Key Deals & Drivers Revenue Keep on the Radar
Growth
Estimate

• Huawei’s opportunities with U.S. Tier 1

operators will likely be limited to
• Huawei is positioning itself to pursue handsets due to regulatory barriers,
Tier 1 contracts. The vendor is but the vendor’s prospects for Tier 2
North currently bidding on a major $1.0 and cable operator contracts are
156.9%
America equipment contract for Sprint, but billion bright.
must contend with government • TBR also expects Huawei’s presence
scrutiny to close any sale. in the smartphone market to pick up
after the company’s release of a series
of low-cost Android devices.

• Huawei will increasingly be selected for

• TBR estimates Europe and MEA services deals in Europe, especially
$8.6
EMEA sales will rise 31% and 34.7% year- 33.0% with Tier 2 and Tier 3 operators whose
billion
to-year, respectively, in 2010. primary goal will be to minimize
deployment costs.
• CALA entered recovery mode in 1H10,
• CALA was hit especially hard during
as operators began to feel more
the recession as access to capital
comfortable with their economic
dried up; however, TBR believes $1.6
CALA 70.2% prospects. TBR expects continued
Huawei leveraged its credit lines billion
momentum in CALA as operators
with Chinese banks to stoke some
struggle to keep up with demand for
investment.
wireless services.

20 TBR NETWORK BUSINESS QUARTERLYSM www.tbri.com © 2010 Technology Business Research, Inc.
Huawei – Calendar 2Q10 Report Resource Management Strategy
TBR
Huawei is expanding its global presence to support
existing operations and prepare for future opportunities

Investments/R&D Focus Personnel Changes

• Huawei will push the limits of energy efficiency, • Huawei added nearly 3,000 R&D personnel to its
cost savings and network speeds to offer ranks in 2010, bringing total R&D staff to over
compelling solutions to its customers. 43,600, up 7% year-to-year.
• Annual revenue per employee has grown steadily
• Huawei’s strategy hinges on helping operators
each year since 2006, demonstrating the vendor’s
address ARPU, bandwidth and cost challenges.
operational leverage.
• TBR believes Huawei is building out support • Headcount is growing disproportionately fast in
infrastructure to better handle outsourced India and North America, where Huawei is
services arrangements. establishing localized operations to better capture
regionalized opportunities.
Huawei’s
Worldwide Operations ANNUAL REVENUE PER EMPLOYEE
TBR
$250
Huawei opened an $230
Huawei plans to R&D center in Revenue In Thousands
$225
$207
add 600 jobs in
North America in Ottawa, Canada to $200

2010. bolster its base of $175

operations in North $159
America and $150 $139
leverage talent in $125
the region.
$100
2006 2007 2008 2009
SOURCE: TB R A ND HUA WEI

21 TBR NETWORK BUSINESS QUARTERLYSM www.tbri.com © 2010 Technology Business Research, Inc.
Huawei – Calendar 2Q10 Report Future Outlook
TBR
Huawei will continue to compete aggressively with incumbent vendors,
pushing its value proposition to cost-conscious operators
TBR Outlook

• Equipment vendors believe the overall telecommunications market for equipment and
services will grow at a rate of 0% to 5% for the remainder of 2010 as operator spend
resumes alongside regional economic recovery.
Industry • TBR believes sales in China will be significantly lower than 2009 comparisons as 3G
network rollouts reach completion. As such, vendors will focus additional resources on
India, where growth prospects mimic those seen in China in past years. However, vendors
must obtain the necessary security clearances and overcome hurdles presented by the
cautious Indian government to conduct business within the country.

• Ericsson’s purchase of Nortel’s wireless assets and Nokia Siemens’ buyout of Motorola’s
wireless business have solidified both vendors’ stakes in North America. TBR believes the
altered competitive landscape in North America will make it more difficult for marginalized
Competitors players like Huawei to win business.
• With a stronger services portfolio, Huawei will begin the challenge of aggressively going
after incumbents’ bread-and-butter services businesses.

• Huawei will push deeper into North America, leveraging strategic relationships and
Company building out its resource base in the region.
Strategy • Huawei will take steps to be more transparent with authorities in India and the United
States to ease both countries’ concerns over national security.

22 TBR NETWORK BUSINESS QUARTERLYSM www.tbri.com © 2010 Technology Business Research, Inc.
Huawei – Calendar 2Q10 Report Future Outlook
TBR
Huawei’s growing reputation as a maker of quality products at attractive
prices positions the vendor favorably for securing recurring business
TBR Outlook

• Huawei predicts sales will grow 20% in 2010 to $26.2 billion on the back of strong
international growth.
• TBR believes Huawei’s margins will fall slightly from 2009 levels as incumbents
Financial
compete more aggressively on price, particularly in developed markets.
• TBR estimates Huawei will spend $2.4 billion on R&D in 2010, which will support new
optical, IP and software solutions.

• Huawei will push its SingleRAN platform as a cost- and energy-efficient solution that
can help operators more easily converge their 2G, 3G and, increasingly, 4G network
Go-to-Market assets.
• Huawei will seek to win small portions of contracts with new customers to establish
relationships and position the company for a greater share of future contracts.

• Huawei will focus on building out manufacturing, R&D and support facilities in India to
Resource address Indian concerns and take advantage of the country’s relatively low labor costs.
Management • Huawei will also build out R&D facilities and sales & marketing staff in North America
as the company prepares for rapid expansion in Canada and the United States.

23 TBR NETWORK BUSINESS QUARTERLYSM www.tbri.com © 2010 Technology Business Research, Inc.
Huawei – Calendar 2Q10 Report
TBR
TBR Coverage and Overview
Network Business Quarterly About
In addition to analyst inquiry time, custom projects and industry benchmarking, Technology Business Research:
TBR’s NBQ quarterly reports provide an in-depth view of the leading equipment
vendors and service providers in the network, telecom and mobility chains: • Unique focus on company-centric
research from a combined
Accenture Google Motorola T-Mobile USA
business, financial and technical
Alcatel-Lucent HP Nokia Verizon Wireless perspective
AT&T Wireless Huawei Nokia Siemens Yahoo • Key advisor to high-tech firms, users
Cisco IBM Samsung ZTE of high-tech and financial markets

Ericsson Microsoft Sprint Nextel • Often quoted in major business and

industry news sources
TBR NBQ covers key segments such as telecom infrastructure services, network
• Founded in 1996
equipment, software and enabling platforms and wireless terminals. We analyze
how companies’ strategies, actions and results change each quarter, and what
might be expected in coming quarters. TBR puts the information in context by
presenting how the company has performed historically, along with how it fares
when benchmarked against competitors.
Computer Business Quarterly Software Business Quarterly Professional Services Business
Quarterly
Covers key segments of the hardware industry, Covers the key segments of the software Covers IT services such as strategy and
such as PCs, servers, storage, industry including: ERP systems, CRM, SCM, management consulting, systems integration
microprocessors, imaging and printing, displays SRM and BI applications, middleware, storage, and outsourcing.
and handheld devices. database, management tools, security software,
and client and server operating systems.
Coverage includes companies such as Dell, Coverage includes BMC Software, IBM Coverage includes companies such as
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This report is based on information made available to the public by the vendor and other public sources. No representation is made that this information is accurate or complete. Technology Business Research will not 
be held liable or responsible for any decisions that are made based on this information. This report is not a recommendation to purchase securities. This report is copyright protected and supplied for the sole use of 
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24 TBR NETWORK BUSINESS QUARTERLYSM www.tbri.com © 2010 Technology Business Research, Inc.
Huawei – Calendar 2Q10 Report Appendix – Income Statement
TBR
HUAWEI TECHNOLOGIES CORPORATION
Consolidated Income Statement
(in $ Thousands Except per Share Data) TBR
CALENDAR YEAR 2005 2006 2007 2008 2009 2010 Est.
FISCAL YEAR 2005 2006 2007 2008 2009 2010 Est.
Revenue $ 5,981,542 $ 8,503,897 $ 12,840,113 $ 18,070,917 $ 21,820,963 $ 26,200,000
Cost of Sales 3,559,366 5,424,011 7,936,732 10,890,002 13,188,406 15,800,000
Gross Profit 2,422,176 3,079,886 4,903,381 7,180,916 8,632,557 10,400,000
R&D 588,000 850,390 1,284,011 1,510,853 1,952,862 2,400,000
SG&A 1,013,656 1,502,472 2,349,741 3,235,871 3,538,135 4,400,000
Total Operating Expenses 1,601,656 2,352,862 3,577,867 4,746,724 5,490,997 6,800,000
Other Operating Income/Loss 30,091 106,029 77,655 96,692 59,728 600,000
Operating Income 850,611 620,995 1,247,859 2,337,499 3,081,833 3,000,000
Net financing costs 38,369 38,918 198,881 955,810 (183,721) (300,000)
Share of losses of associates 12,552 15,025 7,273 27,853 23,862 25,000
Income before income taxes 799,690 567,052 1,041,705 1,353,836 3,241,692 3,275,000
Income taxes expense 115,788 54,664 84,807 221,238 566,535 589,500
Minority Interest 3,079 200 - (1,010) 3,074 3,000
Net Income $ 680,823 $ 512,188 $ 956,898 $ 1,133,608 $ 2,672,083 $ 2,682,500

PERCENTAGE OF REVENUE
Revenue 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of Revenues 59.5% 63.8% 61.8% 60.3% 60.4% 60.3%
Gross Profit 40.5% 36.2% 38.2% 39.7% 39.6% 39.7%
R&D 9.8% 10.0% 10.0% 8.4% 8.9% 9.2%
SG&A 16.9% 17.7% 18.3% 17.9% 16.2% 16.8%
Operating Income 14.2% 7.3% 9.7% 12.9% 14.1% 11.5%
Net Income 11.4% 6.0% 7.5% 6.3% 12.2% 10.2%

YEAR-TO-YEAR CHANGE
Revenue 56.3% 42.2% 51.0% 40.7% 19.0% 20.1%
Cost of Revenues 85.5% 52.4% 46.3% 37.2% 19.4% 19.8%
Gross Profit 26.9% 27.2% 59.2% 46.4% 18.5% 20.5%
R&D 20.7% 44.6% 51.0% 17.7% 27.4% 22.9%
SG&A 36.7% 48.2% 56.4% 37.7% 7.8% 24.4%
Operating Income 22.1% -27.0% 100.9% 87.3% 30.0% -2.7%
Net Income 9.1% -24.8% 86.8% 18.5% 132.4% 0.4%
SOURCE: TBR ESTIMATES AND HUAWEI
NOTE: Huawei reports annual results only

25 TBR NETWORK BUSINESS QUARTERLYSM www.tbri.com © 2010 Technology Business Research, Inc.
Huawei – Calendar 2Q10 Report Appendix – Balance Sheet
TBR
HUAWEI NETWORKS
Consolidated Balance Sheet
(in $ Thousands)
TBR
CALENDAR YEAR 2005 2006 2007 2008 2009
FISCAL YEAR 2005 2006 2007 2008 2009
ASSETS
Cash and cash equivalents $ 883,029 $ 1,056,042 $ 1,892,266 $ 3,033,106 $ 4,279,315
Trade and other receivables 2,322,711 3,650,086 5,488,077 7,627,720 9,263,944
Investments - 64 - - -
Inventories 1,214,842 1,420,455 2,267,276 3,325,636 3,652,028
Deferred tax assets 109,514 181,529 - 540,033 753,477
Total Current Assets 4,530,096 6,308,176 9,647,619 14,526,497 17,948,763
Plant and Equipment, Net 894,142 939,784 931,721 1,051,348 1,217,538
Intangible Assets 13,862 10,937 15,038 18,328 80,954
Other Assets 315,552 237,286 502,556 1,467,846 1,196,750
Total Assets $ 5,753,652 $ 7,496,183 $ 11,096,934 $ 17,064,019 $ 20,444,005

LIABILITIES AND EQUITY

Interest-bearing loans and borrowings $ 288,170 $ 332,883 $ 158,628 $ 1,873,665 $ 1,154,589
Income tax payable 150,197 163,312 94,513 195,549 541,063
Trade and other payables 2,582,120 4,183,046 6,029,505 8,735,208 10,249,305
Provision for warranties 39,887 80,122 151,201 183,860 172,010
Total Current Liabilities 3,060,374 4,759,363 6,433,847 10,988,281 12,116,967
Interest-bearing loans and borrowings 253,173 39,790 215,280 148,069 1,242,863
Other payables 23,412 25,894 336,417 522,427 743,083
Total Liabilities 3,336,959 4,825,047 6,985,544 11,658,777 14,102,913
Minority Interest in Subsidiary Companies 4,912 4,286 127,539 4,762 9,223
Total Capital and Reserves 2,411,781 2,666,850 3,983,851 5,400,479 6,331,869
Total Liabilities and Equity $ 5,753,652 $ 7,496,183 $ 11,096,934 $ 17,064,019 $ 20,444,005

FINANCIAL RATIOS
Days Sales Outstanding 154.96 156.67 156.01 154.07 154.96
Turns on Inventory 2.93 4.12 6.96 6.46 6.25
Days Inventory Outstanding 124.58 88.67 52.41 56.48 58.36
Fixed Asset Turnover 6.69 9.27 13.72 18.23 19.23
Days Cash Outstanding 53.15 44.71 53.05 60.42 70.60
Total Asset Turnover 4.16 1.28 1.38 1.28 1.16
Debt/Asset Ratio 0.54 0.64 0.61 0.67 0.63
Current Ratio 1.48 1.33 1.50 1.32 1.48
Return on Assets 11.8% 7.7% 10.3% 8.1% 14.2%
Return on Equity 28.2% 20.2% 28.8% 24.2% 45.6%
Average Annual Revenue per Employee $ 170,901 $ 139,408 $ 158,520 $ 206,520 $ 229,694
Employee Count 35,000 61,000 81,000 87,502 95,000
CNY/USD Exchange Rate 6.9292 6.831
SOURCE: TBR AND HUAWEI
NOTE: Huawei only reports Balance Sheet annually

26 TBR NETWORK BUSINESS QUARTERLYSM www.tbri.com © 2010 Technology Business Research, Inc.
Huawei – Calendar 2Q10 Report Appendix – Revenue Model
TBR

TBR HUAWEI REVENUE MODEL

CALENDAR YEAR 2006 2007 2008 2009 2010 Est.
FISCAL YEAR 2006 2007 2008 2009 2010 Est.
IN $ THOUSANDS
Reported Revenue $ 8,503,897 $ 12,840,113 $ 18,070,917 $ 21,820,963 $ 26,200,000
Wireless $ 2,636,208 $ 3,980,435 $ 5,601,984 $ 6,328,079 $ 7,700,000
Fixed $ 1,165,034 $ 1,399,572 $ 1,445,673 $ 1,527,467 $ 1,750,000
Optical $ 1,360,624 $ 2,189,790 $ 3,175,937 $ 4,548,599 $ 5,050,000
Data $ 807,870 $ 1,200,000 $ 1,264,964 $ 1,527,467 $ 2,000,000
Service & Software $ 1,530,701 $ 1,964,537 $ 2,791,957 $ 3,644,101 $ 4,900,000
Handset $ 1,003,460 $ 2,105,779 $ 3,790,401 $ 4,245,250 $ 4,800,000
PERCENTAGE OF REVENUE
Reported Revenue 100.0% 100.0% 100.0% 100.0% 100.0%
Wireless 31.0% 31.0% 31.0% 29.0% 29.4%
Fixed 13.7% 10.9% 8.0% 7.0% 6.7%
Optical 16.0% 17.1% 17.6% 20.8% 19.3%
Data 9.5% 9.3% 7.0% 7.0% 7.6%
Service & Software 18.0% 15.3% 15.5% 16.7% 18.7%
Handset 11.8% 16.4% 21.0% 19.5% 18.3%
YEAR-TO-YEAR CHANGE
Reported Revenue 42.2% 51.0% 40.7% 20.8% 20.1%
Wireless 29.5% 51.0% 40.7% 13.0% 21.7%
Fixed 6.6% 20.1% 3.3% 5.7% 14.6%
Optical 38.2% 60.9% 45.0% 43.2% 11.0%
Data 33.5% 48.5% 5.4% 20.8% 30.9%
Service & Software 122.6% 28.3% 42.1% 30.5% 34.5%
Handset 96.6% 109.9% 80.0% 12.0% 13.1%
SOURCE: TBR ESTIMATES AND HUAWEI
NOTE: Huawei reports annual results only

27 TBR NETWORK BUSINESS QUARTERLYSM www.tbri.com © 2010 Technology Business Research, Inc.
Huawei – Calendar 2Q10 Report Appendix – Geographic Model
TBR
TBR HUAWEI REVENUE BY GEOGRAPHIC REGION
CALENDAR YEAR 2006 2007 2008 2009 2010 Est.
FISCAL YEAR 2006 2007 2008 2009 2010 Est.
IN $ THOUSANDS
China
Sales $ 2,950,852 $ 3,595,232 $ 4,517,729 $ 10,146,748 $ 9,170,000
Orders $ 3,850,000 $ 4,853,563 $ 6,356,168 $ 10,042,746 $ 10,544,883
International
Sales $ 5,553,045 $ 9,244,881 $ 13,553,188 $ 11,674,215 $ 17,030,000
Asia Pacific (excl. China) $ 2,740,511 $ 3,799,383 $ 5,743,188 $ 3,842,815 $ 5,764,000
India $ 186,000 $ 600,000 $ 1,300,000 $ 1,560,000 $ 1,598,200
CALA $ 450,000 $ 900,000 $ 1,539,000 $ 923,400 $ 1,572,000
EMEA $ 2,270,000 $ 4,399,296 $ 6,040,000 $ 6,500,000 $ 8,646,000
Europe $ 770,000 $ 2,099,296 $ 2,981,000 $ 3,000,000 $ 3,930,000
MEA $ 1,500,000 $ 2,300,000 $ 3,059,000 $ 3,500,000 $ 4,716,000
North America $ 92,533 $ 146,203 $ 231,000 $ 408,000 $ 1,048,000
International Orders $ 7,150,000 $ 11,146,437 $ 16,943,832 $ 20,115,650 $ 21,455,117
Asia Pacific (excl. China) $ 2,000,000 $ 2,500,000 $ 4,650,000 $ 6,649,500 $ 6,981,975
India $ 350,000 $ 700,000 $ 2,000,000 $ 2,400,000 $ 3,360,000
CALA $ 566,500 $ 750,000 $ 1,250,000 $ 1,562,500 $ 1,796,875
EMEA $ 4,479,000 $ 7,354,316 $ 10,064,091 $ 10,404,646 $ 10,676,267
North America $ 104,500 $ 542,121 $ 979,741 $ 1,499,004 $ 2,000,000
Total Revenue $ 8,503,897 $ 12,840,113 $ 18,070,917 $ 21,820,963 $ 26,200,000
Total Orders $ 11,000,000 $ 16,000,000 $ 23,300,000 $ 30,158,396 $ 32,000,000
PERCENTAGE OF REVENUE
China 34.7% 28.0% 25.0% 46.5% 35.0%
International 65.3% 72.0% 75.0% 53.5% 65.0%
Asia Pacific (excl. China) 32.2% 29.6% 31.8% 17.6% 22.0%
India 2.2% 4.7% 7.2% 7.1% 6.1%
CALA 5.3% 7.0% 8.5% 4.2% 6.0%
EMEA 26.7% 34.3% 33.4% 29.8% 33.0%
Europe 9.1% 16.3% 16.5% 13.7% 15.0%
MEA 17.6% 17.9% 16.9% 16.0% 18.0%
North America 1.1% 1.1% 1.3% 1.9% 4.0%
YEAR-TO-YEAR GROWTH (REVENUE)
China -17.8% 21.8% 25.7% 124.6% -9.6%
International 132.1% 66.5% 46.6% -13.9% 45.9%
Asia Pacific (excl. China) NA 38.6% 51.2% -33.1% 50.0%
India 86.0% 222.6% 116.7% 20.0% 2.4%
CALA NA 100.0% 71.0% -40.0% 70.2%
EMEA NA 93.8% 37.3% 7.6% 33.0%
Europe NA 172.6% 42.0% 0.6% 31.0%
MEA NA 53.3% 33.0% 14.4% 34.7%
North America 2993.7% 58.0% 58.0% 76.6% 156.9%
Total Revenue 42.2% 51.0% 40.7% 20.8% 20.1%
PERCENTAGE OF ORDERS
China 35.0% 30.3% 27.3% 33.3% 33.0%
International 65.0% 69.7% 72.7% 66.7% 67.0%
YEAR-TO-YEAR GROWTH (ORDERS)
China 10.3% 26.1% 31.0% 58.0% 5.0%
International 51.7% 55.9% 52.0% 18.7% 6.7%
Total Orders 34.1% 45.5% 45.6% 29.4% 6.1%
SOURCE: TBR ESTIMATES AND HUAWEI
NOTE: Huawei only reports annual financial results

28 TBR NETWORK BUSINESS QUARTERLYSM www.tbri.com © 2010 Technology Business Research, Inc.
Huawei – Calendar 2Q10 Report Appendix – Opex Model
TBR
TBR HUAWEI OPERATING EXPENSE MODEL
CALENDAR YEAR 2005 2006 2007 2008 2009
FISCAL YEAR 2005 2006 2007 2008 2009
IN $ THOUSANDS
Total Revenue $ 5,981,542 $ 8,503,897 $ 12,560,356 $ 18,328,956 $ 21,500,000
SG&A Expense $ 1,013,656 $ 1,502,472 $ 2,349,741 $ 3,235,871 $ 3,538,135
Sales & Marketing Expense $ 608,194 $ 901,483 $ 1,409,844 $ 1,941,523 $ 2,122,881
General and Administrative Expense $ 405,462 $ 600,989 $ 939,896 $ 1,294,349 $ 1,415,254
R&D Expense $ 588,000 $ 850,390 $ 1,284,011 $ 1,510,853 $ 1,952,862
SALES AND MARKETING EXPENSE BREAKOUT
Sales Expense $ 364,916 $ 540,890 $ 845,907 $ 1,164,914 $ 1,273,729
Partner and Channel Spending $ 91,229 $ 135,223 $ 211,477 $ 291,228 $ 318,432
Marketing Spending $ 152,048 $ 225,371 $ 352,461 $ 485,381 $ 530,720
Advertising $ 91,229 $ 135,223 $ 211,477 $ 291,228 $ 318,432
Total Sales and Marketing Expense $ 608,194 $ 901,483 $ 1,409,844 $ 1,941,523 $ 2,122,881
Total SG&A Expense 16.9% 17.7% 18.7% 17.7% 16.5%
Sales and Marketing Expense 10.2% 10.6% 11.2% 10.6% 9.9%
Sales Expense 6.1% 6.4% 6.7% 6.4% 5.9%
Partner and Channel Spending 1.5% 1.6% 1.7% 1.6% 1.5%
Marketing Spending 2.5% 2.7% 2.8% 2.6% 2.5%
Advertising 1.5% 1.6% 1.7% 1.6% 1.5%
General and Administrative 6.8% 7.1% 7.5% 7.1% 6.6%
CORPORATEWIDE HEADCOUNT
R&D 16,800 29,280 34,830 37,626 40,850
Marketing, Sales and Customer Service 13,300 23,180 32,400 35,001 38,000
Supply Chain 2,800 4,880 8,100 8,750 9,500
Admin. 2,100 3,660 5,670 6,125 6,650
Total Employees 35,000 61,000 81,000 87,502 95,000
SOURCE: TBR ESTIMATES AND HUAWEI
NOTE: Huawei only reports annual financial results

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Huawei – Calendar 2Q10 Report Appendix – Forecast Model
TBR

TBR HUAWEI FINANCIALS AND TBR QUARTERLY PROJECTION

CALENDAR YEAR 2006 2007 2008 2009 2010 Est.
FISCAL YEAR 2006 2007 2008 2009 2010 Est.
IN $ THOUSANDS
Net Sales $ 8,503,897 $ 12,840,113 $ 18,070,917 $ 21,820,963 $ 26,200,000
Gross Profit $ 3,079,886 $ 4,903,381 $ 7,180,916 $ 8,632,557 $ 10,400,000
SG&A $ 1,502,472 $ 2,349,741 $ 3,235,871 $ 3,538,135 $ 4,400,000
R&D $ 850,390 $ 1,284,011 $ 1,510,853 $ 1,952,862 $ 2,400,000
Operating Income $ 620,995 $ 1,247,859 $ 2,337,499 $ 3,081,833 $ 3,000,000
Net Income $ 512,188 $ 956,898 $ 1,133,608 $ 2,672,083 $ 2,682,500
PERCENTAGE OF REVENUE
Gross Margin 36.2% 38.2% 39.7% 39.6% 39.7%
SG&A 17.7% 18.3% 17.9% 16.2% 16.8%
R&D 10.0% 10.0% 8.4% 8.9% 9.2%
Operating Margin 7.3% 9.7% 12.9% 14.1% 11.5%
Net Margin 6.0% 7.5% 6.3% 12.2% 10.2%
YEAR-TO-YEAR GROWTH
Net Sales 42.2% 51.0% 40.7% 20.8% 20.1%
Gross Profit 27.2% 59.2% 46.4% 20.2% 20.5%
SG&A 48.2% 56.4% 37.7% 9.3% 24.4%
R&D 44.6% 51.0% 17.7% 29.3% 22.9%
Operating Income -27.0% 100.9% 87.3% 31.8% -2.7%
Net Income -24.8% 86.8% 18.5% 135.7% 0.4%
SOURCE: HUAWEI AND TBR ESTIMATES
NOTE: Huawei only reports annual financial results

30 TBR NETWORK BUSINESS QUARTERLYSM www.tbri.com © 2010 Technology Business Research, Inc.
Huawei – Calendar 2Q10 Report Appendix - Graphs
TBR
Huawei Financial Graphs

TBR REVENUE GROWTH YEAR-TO-YEAR TBR HUAWEI PERCENTAGE OF REVENUE BY REGION

70.0% 60%

60.0% 50%
51.0%
50.0% 40%
42.2% 40.7%
40.0% 30%
30.0% 20%
19.0% 20.1%
20.0%
10%
10.0%
0%
0.0% 2006 2007 2008 2009
2006 2007 2008 2009 2010 Est. China APAC (excluding China)
CALA EMEA
North America
SOURCE: TB R A ND HUA WEI
SOURCE: TB R A ND HUA WEI

TBR GROSS MARGIN TBR OPERATING MARGIN

50% 16%
14.1%
36.2% 38.2% 39.7% 39.6% 39.7% 12.9%
40% 11.5%
12%
9.7%
30%
8% 7.3%
20%

4%
10%

0% 0%
2006 2007 2008 2009 2010 Est. 2006 2007 2008 2009 2010 Est.
SOURCE: TB R ESTIM A TES A ND HUA WEI SOURCE: TB R ESTIM A TESA ND HUA WEI

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Huawei – Calendar 2Q10 Report Appendix - Graphs
TBR
Huawei Financial Graphs

TBR TBR
SG&A AS A PERCENTAGE OF REVENUE R&D AS A PERCENTAGE OF REVENUE

20.0% 12.0%
17.7% 18.3% 17.9%
16.8% 10.0% 10.0% 9.2%
16.2% 8.9%
8.4%
15.0% 9.0%

10.0% 6.0%

3.0%
5.0%

0.0%
0.0%
2006 2007 2008 2009 2010 Est.
2006 2007 2008 2009 2010 Est.
SOURCE: TB R A ND HUA WEI SOURCE: TB R A ND HUA WEI

RETURN ON ASSETS TBR RETURN ON EQUITY

TBR
16%
14.2% 45.6%
14% 45%
12%
10.3%
10%
35%
7.7% 8.1%
8%
28.8%
6% 24.2%
25%
4% 20.2%
2%
15%
0%
2006 2007 2008 2009
2006 2007 2008 2009
SOURCE: TB R A ND HUA WEI
SOURCE: TB R A ND HUA WEI

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Huawei – Calendar 2Q10 Report Appendix - Graphs
TBR
Huawei Financial Graphs

TBR DAYS CASH OUTSTANDING

75.00 70.60
60.42
60.00

Number of Days
53.05
44.71
45.00

30.00

15.00

0.00
2006 2007 2008 2009
SOURCE: TB R A ND HUA WEI

DEBT/ASSET RATIO CURRENT RATIO

TBR TBR
0.75 2.00
0.64 0.67
0.61 0.63
0.60 1.50 1.48
1.50
1.33 1.32
0.45
1.00
0.30

0.15 0.50

0.00
0.00
2006 2007 2008 2009
2006 2007 2008 2009

SOURCE: TB R A ND HUA WEI SOURCE: TB R A ND HUA WEI

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Huawei – Calendar 2Q10 Report Appendix - Graphs
TBR
Huawei Go-to-Market and Resource Management Graphs

TBR INVENTORY TURNS TBR TOTAL ASSET TURNOVER

8.00 1.75
6.96 6.46 1.38
6.25 1.50
Number of Turns

Number of Turns
6.00 1.28 1.28 1.16
1.25
4.12 1.00
4.00
0.75
2.00 0.50
0.25
0.00 0.00
2006 2007 2008 2009 2006 2007 2008 2009

SOURCE: TB R A ND HUA WEI SOURCE: TB R A ND HUA WEI

TBR FIXED ASSET TURNS TBR DAYS SALES OUTSTANDING

24.0 180.00
156.67 156.01 154.96
154.07
18.23 19.23 150.00

Number of Days
18.0
Number of Turns

120.00
13.72
12.0 90.00
9.27
60.00
6.0
30.00

0.0 0.00
2006 2007 2008 2009 2006 2007 2008 2009
SOURCE: TB R A ND HUA WEI SOURCE: TB R A ND HUA WEI

34 TBR NETWORK BUSINESS QUARTERLYSM www.tbri.com © 2010 Technology Business Research, Inc.
Huawei – Calendar 2Q10 Report Appendix – Alliances
TBR
Huawei Alliances
Company Scope of Partnership
Huawei partnered with Amerilink Telecom, a start-up run by former Sprint employees,
Amerilink Telecom to help the vendor penetrate further into the North American market. Amerilink has
August 2010 also become a key U.S. distributor of Huawei equipment. Huawei hopes its partnership
will better position the firm to win deals with Tier 1 operators, particularly Sprint.
Huawei and IPWireless will jointly conduct interoperability testing and service provider
IPWireless trials for each company’s Integrated Mobile Broadcast (IMB) technology. IMB
technology offloads data traffic from 3G networks, allowing live video streaming and
July 2010 broadcasting and storage of content on mobile devices. Huawei and IPWireless are
conducting these tests to ensure mobile devices are compatible with IMB networks.
PerSay Huawei and Persay, a biometric speaker verification product supplier, have entered a
partnership that will see PerSay’s VocalPassword and FreeSpeech voice biometrics
April 2010 offerings integrated with Huawei’s IP contact center product suite.
Huawei and Opera entered a partnership whereby Huawei will preinstall the Opera
Opera Software Mobile 10 browser on various models of its mobile phones. Opera’s cross-platform
February 2010 user interface software allows operators and device manufacturers to install a mobile
browser across a variety of devices.
German Telecom Huawei, German Telecom and T-Mobile signed a Memorandum of Understanding to
identify, develop and test M2M solutions. The partners will acquire pilot customers to
T-Mobile
test M2M products and services, as well as build out distribution and business models
January 2010 around M2M.

Tianjin Jinke Huawei and Tianjin Jinke will develop and bring to market e-publishing solutions for
Electronics System telecom carriers. Tianjin Jinke will build terminals for the e-reader, while Huawei will
provide back-office software to manage copyrights, billing, publishing and customs.
January 2010 The first e-reader will be launched with China Mobile in early 2010.

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Huawei – Calendar 2Q10 Report Appendix – Recent Product Announcements
TBR
Huawei Recent Product Announcements
Product Series Configuration

• End-to-end solution that includes optical distribution frames, fiber distribution

terminals, fiber access terminals, optical filters, optical splitters, closures and access
Easy ODN
terminal boxes
June 2010
• Solution lets operators deploy optical distribution networks with easy operation,
maintenance and administration

• Metropolitan OTN system accommodates data, video and storage while reducing
OSN8800 T16 operator costs through energy efficiency, low maintenance and space-saving features
June 2010 • Achieves 40G/100G transport and offers full-service cross-connection capabilities that
support ODUk wavelength and packet-cross connections

• Pre-integration solution for network fault management developed with HP

iManager U2000-
TeMIp SNMP- • iManager U2000 provides end-to-end visualized management, accurate error locating
based solution and enhanced O&M efficiency
March 2010 • This solution decreases the Operation Support System integration period for
operators

• Triple-mode LTE modem compatible with LTE, UMTS and GSM

E398 Modem
• Based on Qualcomm’s MDM9200TM chipset
February 2010
• Allows users to switch between standards

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Huawei – Calendar 2Q10 Report Appendix – Recent Product Announcements
TBR
Huawei Recent Product Announcements (continued)
Product Series Configuration

• IP network assessment and optimization system that integrates IP control and IP

iManager U2520
forwarding planes
February 2010
• Includes visualized IP service quality and visualized IP route functions

SingleRAN@Broad
• Mobile broadband solution that handles increased mobile data traffic
Solution
• Decreases per-bit cost in sites, transport and operation & maintenance
February 2010

CX600-X1/X2 • 300mm-depth IP platform with 20G/40Gbps capacity

Metro Services • Enables IP intelligence on metro network edge and drive convergence and improves
Platform capability and flexibility
February 2010 • Enhances the IPTime broadband metro solution

• 1588v2-compliant DSL prototype addresses issues with GPS clock synchronization

IPTime Mobile • Time synchronization accuracy to nanosecond level
Backhaul Solution • DSL with microcell and LTE base stations leverage existing copper wire from legacy
January 2010 networks
• Backhaul option for operators building out 3G and or 4G networks

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Huawei – Calendar 2Q10 Report Appendix – Customer Deals
TBR
Huawei Recent Customer Deals
Company Scope of Deal
Huawei is providing BT with optical access and transmission products, including Huawei’s
BT SingleFAN solution, to help with the deployment of BT’s new national fiber network. BT
boosted its investment in broadband by £1 billion ($1.5 billion) to bring faster internet
United Kingdom
services to two-thirds of U.K. households by 2015. Huawei has been an integral supplier
August 2010 of fiber access equipment to BT since the operator’s broadband deployment began in
2008.

Maxis Berhad Huawei will build and manage an end-to-end turn-key FTTx High-Speed Internet network
using GPON technology for Maxis Berhad. The duration of the managed services
Malaysia
agreement is three years. Maxis Berhad plans to cover 12 million customers across
August 2010 Malaysia, and will particularly target enterprise customers.

Vodafone
Vodafone is offering customers in the United Kingdom a monthly Mi-Fi package using the
United Kingdom
Huawei R201 router.
August 2010

Telefonica Telefonica has been using Huawei’s service delivery platform (SDP) in its Latin American
operations and now plans to deploy the software globally. The SDP fits Telefonica’s
World
application development strategy by establishing a foundation for these services to be
August 2010 created.

Tata
Teleservices Tata Teleservices installed Huawei’s MSC Pool solution, boosting service and reliability
India for the operator’s 1.5 million subscribers in the Mumbai metro area.
August 2010

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Huawei – Calendar 2Q10 Report Appendix – Customer Deals
TBR
Huawei Recent Customer Deals (continued)
Company Scope of Deal
Huawei deployed its 40G Optical Transport Network solution for PCCW, allowing PCCW
customers to experience higher bandwidth and more flexible service features. Transport
PCCW capacity increases to 3.2 Terabit and bandwidth per wavelength jumps 400% with the use
of technologies like 80-wavelength 40G, Reconfiguration Optical Add/drop Multiplexer,
Hong Kong and optical and electrical cross-connection.
August 2010 In a separate agreement also announced in August, Huawei deployed its 42Mb/s Dual
Carrier HSPA+ solution, doubling the downlink peak data rate of PCCW’s existing HSPA+
network covering Hong Kong.
SingTel SingTel deployed Huawei’s NE5000E 1+2 router cluster system in its converged IP
Singapore backbone network. This router system, the industry’s most energy efficient, achieves
August 2010 2.56T port capacity and is scalable to 200T.

China TieTong Huawei was selected by China TieTong Telecommunications, a subsidiary of China
Mobile, to exclusively provide equipment for the expansion of the operator’s CTTNET
China
nationwide broadband IP network. Huawei is supplying its Quidway NetEngine5000E core
August 2010 router, which achieve 2.56T port capacity and are scalable to 200T.
StarHub StarHub adopted a smartphone signaling solution from Huawei that enhances network
Singapore performance by reducing smartphone signaling traffic. The solution reduces 56% of the
July 2010 redundant signaling loads in StarHub’s smartphone mobile data service.

Vodafone selected Huawei and Ericsson to upgrade its existing base stations to LTE and
Vodafone roll out LTE-compatible base stations across rural regions of Germany. In all, Vodafone
Germany plans to have 1,500 base stations installed by 2011. Vodafone Germany is embracing
July 2010 wireless broadband as a less expensive alternative to rolling out fixed line access for
internet services.

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Huawei – Calendar 2Q10 Report Appendix – Customer Deals
TBR
Huawei Recent Customer Deals (continued)
Company Scope of Deal
ONO ONO selected Huawei to upgrade and run its voice network under a seven-year renewable
contract. Huawei will deploy softswitches, media gateways and other IMS solutions. Huawei
Spain
will also provide managed services for the network, taking on 40 ONO employees to help with
July 2010 activity monitoring, workflow management and configuration management.
Wind Huawei will deploy HSPA+ and LTE base stations for Italian operator Wind. Wind selected
Huawei’s SingleRAN platform because it can converge GSM, HSPA and LTE RAN onto one
Italy
platform. The operator will also purchase core network equipment supporting SDH and VoIP
June 2010 and IMS infrastructure from Huawei to support its all-IP strategy.
Vodafone Vodafone Spain is offering femtocells manufactured by Huawei to its Office customers, which
Spain include 25,000 companies with over 500,000 lines across Spain. The femtocells enable
June 2010 Vodafone’s customers to realize better voice and data access.
NET Huawei will deploy its IPTime broadband metro solution for Brazilian cable and broadband
provider NET. The deployment will enable high-definition video service for NET subscribers
Brazil
using video packet retransmission and fast channel change, which are part of Huawei’s
May 2010 SingleMetro and Multiplay solutions.
HiBeam
Internet & Huawei supplied radio equipment to HiBeam to support broadband services to subscribers in
Voice the Midwest and Southeast. Speeds can now reach 3-6 mbps on average, with bursts up to
United States 10 mbps. The new equipment supports migration to LTE.
May 2010
vividwireless Huawei and vividwireless launched Australia’s first commercial WiMAX network in Perth. The
network delivers wireless access speeds comparable to ADSL2+ connections using
Australia
Beamforming and 4T4R technology. The rollout in Perth took six months to build and Huawei
May 2010 will build out additional WiMAX networks for vividwireless in 2H10.

40 TBR NETWORK BUSINESS QUARTERLYSM www.tbri.com © 2010 Technology Business Research, Inc.
Huawei – Calendar 2Q10 Report Appendix – Customer Deals
TBR
Huawei Recent Customer Deals (continued)
Company Scope of Deal
Saudi Telecom
Company (STC) Huawei will deploy a pre-commercial LTE network for STC covering several cities in
Saudi Arabia, including Riyadh and Dammam. Additionally, STC will use Huawei IP
Saudi Arabia
microwave products, specifically the RTN900 series, in its LTE backhaul.
April 2010
SaskTel
SaskTel is using Huawei’s SingleRAN solution to build out an HSPA+ network in
Canada
Canada. Huawei’s solution allows smooth migration to LTE.
March 2010
MobiTel
MobiTel is paying Huawei $200 million to expand network coverage in Cambodia, and
Cambodia
consists of equipment and services.
March 2010
Telefonica O2 Huawei will assume control of field service and maintenance of Telefonica O2’s mobile
Germany communications infrastructure in Germany once it completes the network expansion. At
March 2010 that time, 220 employees will be transferred to Huawei.
Telenor Denmark As part of a contract signed with Telenor, Huawei will deploy a Mobile Backhaul
Commercial Network in Denmark. In addition, Huawei will provide its Packet Transport
Denmark
Network mobile compliant backhaul solution. The network will comply with the new
February 2010 industry standard IEEE 1588v2 in order to enable an efficient LTE conversion.
China Unicom Huawei is expanding China Unicom’s China 169 backbone network by deploying its
China NE5000E cluster router system, which will provide four new backbone nodes in
February 2010 Chengdu, Xi’an, Chongqing and Wuhan.
MobileOne (M1)
Huawei will provide an ATCA platform-based IMS solution for M1, so the operator can
Singapore
offer VoIP, IPTV, Centrex and HD video conferencing to its subscribers in Singapore.
January 2010

41 TBR NETWORK BUSINESS QUARTERLYSM www.tbri.com © 2010 Technology Business Research, Inc.
Huawei – Calendar 2Q10 Report Appendix – Customer Deals
TBR
Huawei Recent Customer Deals (continued)
Company Scope of Deal
LPTIC Huawei Marine Network was contracted by the Libya Post Telecommunication and
Libya Information Company to lay 177 km of T-E submarine optical fiber cable, with 3.2 Tbit/s
January 2010 of capacity, connecting Tobruk and Emasaed in Libya.
China Telecom Huawei deployed two CDMA2000 1x EV-DO Rev. B networks in Beijing and
Guangzhou for China Telecom. The 3G networks, which operate in the 2.1 GHz and
China
800 MHz dual-band frequencies, will allow China Telecom to offer its subscribers VoIP,
January 2010 VoD and streaming media.
GlobeNet will use Huawei’s OSN 6800 NG-DWDM OTN optical platform hardware to
GlobeNet connect its cable landing station in New Jersey to points of presence in New York,
Americas Brazil, Venezuela, Bermuda and Florida. The platform supports 10 Gbps, 40 Gbps and
January 2010 100 Gbps wavelengths. Huawei will also upgrade the software on GlobeNet’s existing
iManager T2000 Network Management System.
UGL Limited Huawei will supply UGL Limited with a GSM-R solution that will cover 1,455 km of track
and 70 km of rail tunnels across the Sydney metro network. UGL, a rail engineering
Australia
firm, was awarded $225 million in December to design, install and manage a digital
January 2010 train radio system on RailCorp’s electric rail network.
Zain
Huawei installed a blade mobile softswitch for Zain that will cover eight million
Nigeria
customers in Nigeria.
January 2010
MTN Huawei deployed a UMTS900 platform on MTN’s network in Ghana. The platform,
Ghana which is based on Huawei’s 3900-Series Node B, operates in the 900 MHz frequency
January 2010 and will operate in conjunction with MTN’s existing GSM network.
Omantel
Omantel will pay Huawei $26 million to expand coverage of its fixed line network in
Oman
Oman.
January 2010
42 TBR NETWORK BUSINESS QUARTERLYSM www.tbri.com © 2010 Technology Business Research, Inc.
Huawei – Calendar 2Q10 Report Appendix – Facilities Table
TBR
Huawei’s Facilities
Location Function
Shenzhen, China Chinese Headquarters, East Pacific Headquarters
Dusseldorf, Germany European Headquarters, Innovation Center
Darmstadt, Germany Innovation & Demo Center
Moscow, Russia CIS Headquarters
Plano, Texas, United States North American Headquarters
Cairo, Egypt Middle East and North Africa Headquarters
Sao Paulo, Brazil Latin American Headquarters
Johannesburg, South Africa South African Headquarters
Kuala Lumpur, Malaysia Asia Pacific Headquarters

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Huawei – Calendar 2Q10 Report Appendix – Facilities Table
TBR
Huawei’s Facilities (continued)
Location Function
R&D Facility
Beijing, China
WiMAX Interoperability Testing Laboratory
Shenzhen, China R&D Facility
Shanghai, China R&D Facility
Nanjing, China R&D Facility
Hangzhou, China R&D Facility
Chengdu, China R&D Facility
Stockholm, Sweden R&D Facility
Bangalore, India R&D Facility
Dallas, Texas, United States R&D Facility
Silicon Valley, California, United States R&D Facility
Ottawa, Canada R&D Facility
Moscow, Russia R&D Facility
Lagos, Nigeria R&D Facility
Istanbul, Turkey R&D Facility
South Africa R&D Facility
Jakarta, Indonesia R&D & Training Facility
Richardson, Texas, United States LTE Laboratory
Otemahci, Tokyo, Japan LTE Laboratory

44 TBR NETWORK BUSINESS QUARTERLYSM www.tbri.com © 2010 Technology Business Research, Inc.
Huawei – Calendar 2Q10 Report Appendix – Management Table
TBR
Huawei Key Management
Name Position
Ren Zhengfei Chief Executive Officer

Justin Chen Chief Operating Officer

Matt Bross Chief Technology Officer

Ken Hu Executive Vice President

Charlie Chen Senior Vice President of Marketing and Product Management, Huawei USA

Carl Liu President, Huawei Canada

Brian Hoppe CFO, Huawei Australia

Peter Rossi CTO, Huawei Australia

45 TBR NETWORK BUSINESS QUARTERLYSM www.tbri.com © 2010 Technology Business Research, Inc.
 TBR
T E C H N O L O G Y B U S I N E S S R ES E AR C H , I N C .

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© 2010 Technology Business Research, Inc.