Huawei’s rotating chair Guo Ping speaks during an news conference in Shenzhen, Guangdong province, China, on March 29 2019. Picture: REUTERS/TYRONE SIU
Huawei’s rotating chair Guo Ping speaks during an news conference in Shenzhen, Guangdong province, China, on March 29 2019. Picture: REUTERS/TYRONE SIU

Hong Kong — China’s Huawei Technologies called on Washington to drop the “loser’s attitude” and once again rubbished US allegations that its gear could be used by Beijing for spying, as its network business weakens amid mounting global scrutiny.

“The US government has a loser’s attitude. It wants to smear Huawei because it cannot compete against Huawei,” Guo Ping, rotating chair of the world’s top producer of telecoms equipment and number-three maker of smartphones, said on Friday.

“I hope the US can adjust its attitude,” Guo said at a press briefing that was attended by more than 100 journalists from across the world. The US embassy in China declined to comment.

Huawei reported a slower pace of profit growth for 2018 as its network business saw its first drop in revenue in two years, overshadowing a robust 45% jump in its smartphone unit.

Huawei’s outlook has come under a cloud over the past year with the US voicing concerns that its equipment could be used for espionage. Washington has also urged its allies to ban Huawei from building next-generation 5G mobile networks.

The latest blow for the company came on Thursday when Britain rebuked it for failing to fix long-standing security flaws in its mobile network equipment and revealed new “significant technical issues”.

For 2018, the Shenzen-based firm reported a net profit of 59.3-billion yuan ($9bn), up 25% from a year ago, compared to a 28% rise in 2017. Revenue from its carrier business fell 1.3% to 294-billion yuan, which it blamed on telecommunications industry investment cycles.

However, the surge in its consumer business sales to a record 348.9-billion yuan, driven by demand for its premium smartphone models such as the P series and Mate series, helped push global revenue to above $100bn for the first time. Its total revenue rose nearly 20% to about 721-billion yuan, marking the fastest pace of growth in two years.

The performance of the consumer business is in line with what Huawei flagged in January, when it also said it could become the world’s biggest-selling smartphone vendor this year. Guo said he expects all three business groups — consumer, carrier and enterprise — to post double-digit growth this year, although he did not provide a specific number.

The company has previously said it is targeting total revenue of $125bn this year, a record high.

“Moving forward, we will do everything we can to shake off outside distractions, improve management and make progress towards our strategic goals,” Guo said. Huawei has “prepared some inventories for uncertainties” that has reduced its net cash position, Guo added, without giving any details.

Spying would be ‘suicide’

To fight global concerns over its gear, Huawei has launched an unprecedented media blitz by opening up its campus to journalists and parading its typically low-key founder, Ren Zhengfei, in front of media.

It has stepped up the campaign in recent months after Meng Wanzhou, Huawei CFO and Ren’s daughter, was arrested in Canada in December at US behest on charges of bank and wire fraud in violation of US sanctions against Iran. She denies wrongdoing.

The company has said the spying concerns are unfounded.  “Spying would be equal to suicide,” said Song Liuping, Huawei’s chief legal officer. “We have no intention of committing suicide.”

Huawei derived 48.4% of its business from overseas markets in 2018, compared to 49.5% a year earlier.

The company’s fastest-growing region was Europe, Middle East and Africa with a growth of 24.3%, followed by Americas with a growth of 21.3%.

A top company executive said earlier this week that the US campaign against Huawei is having little impact on its sales and that it is unlikely many countries would heed the US call to ban its gear.

Reuters