Despite U.S. Concerns, Huawei Doing Well in Hungary

History

Amid security concerns and increasing controversy between the United States and Chinese tech giant Huawei, the Hungarian branch says misinterpretation of Chinese legislation has led to the current controversy. Speaking to the Budapest Business Journal, Wu Biqiang, CEO of Huawei Technologies Hungary, rejects all allegations of spying as “unfounded and misguided”.

Hungary’s Minister of Finance Mihály Varga (on left hand side of the table, second from top of frame), meets with James Li, European region group president of Huawei Technologies (opposite Varga) in Beijing on April 9. Also at the talks was Huawei Technologies Hungary CEO Wu Biqiang (second from top on right hand side of table).

“There was a big misinterpretation of the 2017 Chinese national security law in the international media, started from the United States,” Wu Biqiang tells the BBJ.

“The Chinese national security law does not oblige Chinese companies to transfer information about customers or install any backdoor or carry out spying,” he insists.  

Huawei, who has emerged as a fierce competitor to Apple and Samsung products and whose telco network equipment is present globally, has been making international headlines over security concerns and alleged spying. The United States has appeared to favor blocking the Chinese giant’s technologies.

“The law only applies to China and it requires the telecom service providers to transfer information only following a specific court order. Huawei cannot be forced to spy, we are a vendor,” Wu Biqiang explains.  

“The U.S. Cloud Act is stricter than the Chinese law. Besides, the U.S. government has not been able to provide any evidence against Huawei to prove we are spying for the Chinese government,” the CEO for the Hungarian business tells the BBJ.  

“Not only Huawei Hungary, but the whole Huawei Technologies group rejects all allegations of spying and we consider the U.S. allegations unfounded and misguided due to economic interest-driven conflict. Thus, Huawei Technologies sued the U.S. government at a Texas court at the beginning of March to protect our interests,” the CEO adds.

U.S. Lobbying

Despite months of reported lobbying by U.S. diplomats, as outlined in a Politico report in February, and increased pressure from the Trump administration, European leaders have appeared to be wary of considering a blanket ban on Huawei’s products. Rather, a dialogue has started about how to stay more secure in an increasingly digital world. Boosting cybersecurity measures has climbed higher up the agenda of both EU member states and the European Commission, according to reports.

For its, part, Hungary has appeared to adopt a neutral stance. “The Hungarian government made it clear that they do not consider our corporation’s activities as a national security risk at all. They said that the trade conflict between the United States and China does not depend on Hungary,” the CEO says.  

Huawei Technologies Hungary has been on a rapid growth path in recent years, seeing USD 280 million revenue in 2018. The manufacturer’s phones are among the most popular brands in Hungary, with its flagship Mate 20 Pro device being the best-seller in Hungary out of all European countries, relative to the size of the markets, in 2018.  

“These results make us optimistic, and we are grateful to the Hungarians and the Hungarian business environment,” Wu Biqiang says.

Huawei has a wide portfolio of products from fixed optical networks to mobile networks, data centers, and data storages to Hungary.  
“Last year, Hungarian sales were going extremely well thanks to the consumer business group; we are selling more and more AI-based smartphones and other AI-supported smart accessories year by year. Besides mobile artificial intelligence, the company has also made huge steps forward in the field of foldable smartphones, Huawei’s first 5G foldable device will soon be available in Hungary,” the CEO says.

Rising Revenue

Huawei’s revenue from all three business domains — carrier, enterprise and consumer business — increased by 40% over the preceding year, according to Huawei’s figures. While the income of the Hungarian company was HUF 57 billion in 2017, it reached nearly HUF 80 bln in 2018, according to non-audited results.

Globally, the company spends 11-13% of its annual income on research and development. Huawei has shipped 40,000 5G base stations worldwide and signed more than 35 commercial 5G contracts globally; it also has multiple operational 5G bases in Hungary. Last year, the Hungarian company says it carried out successful next-generation 5G network tests with Magyar Telekom and Vodafone Magyarország.  

By the end of last year, more than an estimated three-quarters of Hungarians were users of Huawei equipment in their daily communication; not only through smartphones, but also antennas, base stations, switches, and servers, the company says. The company also launched its Europe operations and maintenance center in Hungary in 2017, which aims to help provide cloud solutions for European operators.  

“Let’s make it clear. Apart from the United States, no other country has excluded Huawei Technologies from their market,” the CEO says. “Australia decided to exclude us only from the 5G mobile network implementation, but from no other business domain. Every other country remained open; they think cybersecurity is a technical question,” Wu Biqiang adds.

The CEO underlines that, for Huawei, Hungary provides an excellent and open business environment.  

“There has been no change in the company’s operations, and we will continue to pay a great deal attention to cybersecurity and data protection measures. Huawei Technologies Hungary has been operating in accordance with the legal regulations in force since its appearance in the Hungarian market in 2005, and will continue to closely follow the principle,” Wu Biqiang adds.

Editor’s Note

The Budapest Business Journal approached the Hungarian government for comment, but at the time of going to print, the International Communications Office had still not answered. However, news wire Reuters.com carried on report on April 9 which cited the Ministry of Finance as saying Hungary regards Huawei Technologies as a strategic IT partner. The statement was issued after Minister of Finance Mihály Varga met a senior Huawei executive in Beijing; the minister has been in China to discuss the upgrade of the Budapest-Belgrade rail link, which is to be largely financed by the Asian giant. Varga was quoted as saying that Huawei would help Hungary develop its broadband internet network and meet its goal of high-speed internet access for 90% of families by 2025, as per an earlier agreement. Huawei employs more than 2,000 people and runs its biggest logistic center outside China in Hungary, Varga noted after his meeting with James Li, regional president of Huawei’s European operations, reuters.com added.

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