Huawei growth slows after sanctions and political pressure


Huawei’s mobile phone and consumer division continued to outpace its faltering telecoms equipment arm in the first half, helping the Chinese company to increase sales to Rmb454bn ($64.9bn).

Sales growth slowed to just over 13 per cent, compared with 23 per cent in the first half of 2019, but the privately owned Huawei said its profit margin had improved from 8.7 per cent to 9.2 per cent and that all three of its main divisions had shown growth.

The company published its results on the eve of a decision by the UK government on whether to force its telecoms operators to remove Huawei from their networks and drop it as a supplier for 5G, the next generation of mobile internet.

The group’s telecoms equipment business has faced severe political headwinds, while its consumer division has been affected by trade sanctions that stop its latest phones from using Google’s suite of mobile phone software.

Gartner, the research group, had calculated that Huawei was the worst hit of the major smartphone makers in the first quarter, with shipments declining 27 per cent, but the company said its consumer business had increased sales by 16 per cent to Rmb255.8bn in the first half.

At Huawei’s carrier business, which sells equipment for use by telecoms networks, sales rose 9 per cent to Rmb159.6bn as customers, including BT, Vodafone and Three in the UK, rolled out 5G networks.

“These results show that they continue to choose Huawei when they want reliability, security and value. Our priority here is to build a better-connected UK where everyone can benefit from 5G and fibre broadband, no matter where they live,” said Victor Zhang, Huawei’s vice-president.

The company has previously said that the US campaign against it had materially affected its finances.

Eric Xu, chairman of Huawei, said in March that its annual revenues had undershot expectations by $12bn last year. “The US government’s campaign against Huawei in Europe has had quite a substantial impact on our business,” Mr Xu said.

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