Huawei's UK investment to help secure talent, provide political cover in the U.S

Huawei plans to spend US$2 billion in investment and procurement in the U.K.

Huawei's plan to spend US$2 billion in the U.K. is expected to help the Chinese firm secure additional talent, and could even improve its political standing in the U.S., where company representatives are slated to appear before an upcoming congressional hearing, according to analysts.

The company announced its plan on Tuesday, with $1 billion planned for investment, and the other $1 billion for procurement over five years. By 2017, Huawei will also be increasing its employees in the U.K. to 1,500, up from the current number of 800 employees. Huawei did not immediately comment on the nature of the investment.

Huawei, whose core business has been in supplying networking gear, has been rapidly building up its research and development arm as the company vies to become a major vendor in smartphones and tablets, along with enterprise systems such as servers and storage. Last year, Huawei spent $3.76 billion on R&D, recruiting 11,000 new employees. This year, the company expects to raise that expenditure to $4.5 billion.

Although headquartered in Shenzhen, China, the company is expanding its research organization into other countries in order to recruit the limited pool of IT talent available in the world, said David Wolf, CEO of Wolf Group Asia, a Beijing-based technology consultancy.

"What they (Huawei) realize is that there's a limited number of very smart people in the mobile phone communication business that are going to create the future of the industry," he said. "But not all of them want to live in Shenzhen."

The investment also comes as governments across the world are paying greater attention to the potential security risks of the telecommunication equipment they are buying from vendors such as Huawei and its rivals, Wolf said. Governments will feel more comfortable buying the equipment, knowing that it's been developed in their home market, he added.

"The governments in the future will have to test this equipment, they will have to dig into the depths of it," he said. "It's the only way anyone is going to have comfort with it, especially as more of the (the networking equipment) is developed in China. Not just by Huawei, but by everyone."

Huawei's investment was welcomed by U.K. prime minister David Cameron, according to a company press release. But such warm sentiments toward Huawei have been absent among government officials in the U.S., where the company has faced ongoing opposition in its business activities.

Part of the concerns stem from Huawei's founder Ren Zhengfei previous job with the China's People's Liberation Army as an engineer. Some U.S. lawmakers are concerned that Huawei's telecommunication gear could be used to spy on U.S. activities. On Thursday, Huawei representatives are slated to appear before a U.S. government committee that is examining the security threats from Chinese telecommunication firms working in the country.

Matt Walker, an analyst with research firm Ovum, noted that Huawei has been successful for many years selling telecommunication gear in the U.K., which has close political ties with the U.S.

"Being able to point to widespread adoption in the U.K, should, in theory, help Huawei in its efforts to persuade American politicians and (telecommunication) carriers to give it a chance," he said in an email.

"Whether the timing is coincidental or not, it could help during the upcoming hearings," he added. "Having this U.K. news out there gives Huawei supporters some political cover during the hearings."

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Michael Kan

IDG News Service
Show Comments

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?