It’s unlikely these spaces are as pleasant to Zhengfei now as they were when he built them. For some visiting, they serve as a reminder of a firestorm year that saw western governments start to turn against the Chinese behemoth.
Among the first was Australia, which banned the company in August from participating in providing equipment for ultra-fast 5G networks on the basis of national security concerns.
Four months later, Huawei chief financial officer Sabrina Meng Wanzhou – Zhengfei’s eldest daughter – was arrested in Canada over claims the company breached US sanctions against Iran.
Many close to Huawei believe Wanzhou, who is considered tech royalty in Shenzhen, is being treated as a “bargaining chip” in relations between China and the US.
Zhengfei himself answered “maybe” when asked by CNBC if he thought she was a hostage in the ongoing trade war).
The wounds were opened again last week when the Chinese government mentioned the ban during a World Trade Organisation meeting in Geneva, and Huawei head of global cybersecurity John Suffolk warned Australia faced a future of “mediocrity” in technology after banning the use of their services.
Mobile networks of the future
The quickly approaching era of ultra-fast mobile technology, 5G, is expected to prompt radical changes in sectors like health care, smart home technology, agriculture, entertainment, transport and even critical infrastructure.
The changes under this new network will make sensors quicker, more reliable and less of a drain on battery life.
Huawei’s campus has a showroom dedicated to the many ways it believes 5G will change the world, from eSports and computer games to robotics and virtual reality.
The huge list of industries that will be reliant on 5G is one of the reasons security is front of mind for the Australian government.
It’s also why local telcos, which have faced years of declining revenues as the cost of data plunges, are keen to take advantage of the rollout and find new ways to make money by providing businesses with the applications and solutions themselves.
A report from AMP Capital, set to be released this week, forecasts significant growth for telecommunications infrastructure providers globally on the back of 5G.
“5G will play a big role in consumers’ lives and business in the medium to long term,” AMP Capital head of global listed Infrastructure Giuseppe Corona says.
While Corona says the timeline for when 5G becomes in common usage is “inherently uncertain” it’s expected to be widespread quickly with each mobile generation seeing a more rapid uptake.
“Although the mass-wide adoption of revolutionary applications such as tactile internet for remote surgery or autonomous driving is uncertain, more basic applications such as augmented and virtual reality, and the Internet of Things [where sensors are attached to objects] should be widely available by the mid-2020s,” he says.
For Australian telecommunications companies, this largely means they have to secure a new partner like Ericsson or Nokia to roll out ultra-fast 5G mobile networks. So far, major mobile network providers have not publicly revealed the full impact of the Huawei ban on their businesses.
Vodafone Hutchison Australia’s 4G network – like Optus’ – was built in partnership with the China-based business, said a week ago there would be a delay and a financial impact but could not specify the extent.
TPG Telecom, which is waiting on competition approval to merge with Vodafone, canned its mobile network rollout due to the ban.
During the Shenzhen-based Huawei Global Analysts Summit last week, Suffolk says his expectation is that Australian businesses would “suffer because there isn’t competition”.
“Australian citizens are going to lose out,” Suffolk says. “The two main competitors for Huawei only invest $4 billion each in [research and development]. We invest $20 billion a year.”
Despite this, Telstra and Singtel Optus have both started sharing their plans for the future of 5G in Australia and have begun rolling out the early stages of the infrastructure.
Huawei itself is hoping to lobby the Australian government for changes to the ban but it’s unlikely the law will change should Labor win the Federal Election in May.
Financially speaking, Australia is a drop in the bucket for Huawei. Huawei’s revenue from Australia was $623 million in 2017 compared to $US92 billion worldwide. The majority of the local revenue came from services provided to Singtel Optus and Vodafone Hutchison Australia, whose 4G networks are built using Huawei equipment.
The local results for 2018 are due soon and, on most estimates, Huawei is expected to have had an even better year. But within the next 24 months, even those close to the company acknowledge revenue from Australia will fall due to the ban.
Growing its Australian market share in devices, such as phones, could be a way to bridge some of that gap but it’s unlikely to meet the shortfall any time soon.
Also, while Australia only contributes a small portion to the bottom line, the risk of other nations following its actions shouldn’t be understated.
Other governments, particularly in Europe, have not introduced blanket bans so far. Brussels and the UK both have testing centres to look for security threats and issues in Huawei’s technology (an approach Huawei wanted Australia to take). The US has encouraged its European allies to take a strong stance on cybersecurity.
This is unwelcome news at Huawei, which does business in 170 countries.
Back at Huawei’s Shenzhen headquarters, even the cafeteria suggests global ambitions with seating areas named after locations like Toronto, Dusseldorf, Bahrain, Moscow and St Pauls. And within the showroom dedicated to 5G and the different ways it could shape the future, there are maps detailing the company’s activities internationally (the US and Australia are largely left blank).
It’s unclear whether those maps will change in future. But Huawei’s new and larger campus for 30,000 employees, also in Shenzhen, could be considered a sign of the times.
At this new location under construction at a cost of about 10 billion yuan ($A2.1 billion), called Ox Horn, all the buildings are this time inspired by famous European locations.
Jennifer Duke attended the Huawei Global Analyst Summit 2019 courtesy of Huawei.
Jennifer Duke is a media and telecommunications journalist for The Sydney Morning Herald and The Age.