Huawei posted modest revenue growth and a deep drop in net profits for last year, highlighting what was “crisis mode” for one of the world’s largest telecommunication vendors in its ongoing battle with some Western governments. However, the vendor remains steadfast that it will regain a semblance of operational normalcy in 2023 despite ongoing geopolitical struggles.

The telecom infrastructure giant grew revenues less than 1% last year, highlighting operational challenges the vendor had to traverse due to sales challenges in many Western markets. Most of Huawei’s growth came from its enterprise business that showed a 30% surge in revenues compared to 2021.

Critically, profits dropped nearly 70% year over year to $5.2 billion.

“The company has gone through some challenging times, and I think the perception is right now that our business has stabilized and we're moving steadily forward,” Andy Purdy, chief security officer for Huawei, told SDxCentral in an interview.

Purdy’s comments echoed that of Huawei’s top leadership, which has focused on the vendor’s ability to pivot operations to deal with its new reality.

“A challenging external environment and non-market factors continue to take a toll on Huawei’s operations,” Huawei’s Rotating Chairman Eric Xu noted in a statement tied to the vendor’s latest results. “In the midst of this storm, we have kept racing ahead, doing everything in our power to maintain business continuity and serve our customers.”

Xu’s statement followed his “New Year Message for 2023” comments where he focused on continued digital investments to counter ongoing 5G radio access network (RAN) and technology restrictions in many Western countries.

“In 2022, we successfully pulled ourselves out of crisis mode,” Xu wrote in kicking off the message. “U.S. restrictions are now our new normal, and we’re back to business as usual. It’s been all hands on deck for the past year with every single member of the Huawei team working hard to navigate challenges and improve the quality of our operations.”

Despite those challenges, Huawei remained one of the world’s largest 5G equipment vendor last year.

Huawei’s focus on trust

Xu’s 2023 optimism is valiant in light of more Western countries looking to prohibit the use of equipment from China-based vendors.

Germany, for instance, is considering a ban due to security concerns. The ban could include preventing that country’s telecommunications providers from both installing new 5G equipment as well as require them to replace equipment already installed in German networks.

That move would be similar to already passed efforts in the United States as well as other European countries like the United Kingdom.

“We certainly can't predict what's going to happen in Germany or anywhere else,” Purdy said. “We've had tremendous success up until the present time in Germany, and it's a situation that, notwithstanding the entreaties from the U.S. government, they have decided to think about what's in the best interest of Germans and that's allowed it to continue.”

Purdy also took a pragmatic tone in terms of what impact sales challenges will have on Huawei’s ongoing operations.

“The uncertainty about external pressures on customers and countries not to buy from us, we can't do a lot about that directly,” Purdy said. “But one of the things we've done in working with Germany and the European Union, other countries in Asia and elsewhere is to try to continue the progress toward cybersecurity, privacy protection and the efforts to build on what's been learned in the global community. Some of the movement toward zero trust, some of the emphasis on greater transparency for both cybersecurity and privacy and greater accountability.”

Paul Scanlan, CTO and president advisor for Huawei’s Carrier Business Group, during the recent MWC Barcelona 2023 event attempted to counter the issue of trust that has become a rallying point for its fight against country bans.

“The best way to answer that question is you can ask the 741 customers – and not just trust Paul – and see whether they say they trust Huawei or they don’t trust Huawei,” Scanlan said.

He added that he had hosted meetings with a pair of customers that told him they were sorry they were pushed into this area, and that “we can’t buy your 5G. But we’re here with eight of our executives because we want to maintain the relationship, because we know we can trust you, because you’ve helped us deliver results.”

New rotating chair

Huawei’s trust challenge could be more difficult over the next six months due to the vendor’s own making.

Huawei named CFO Sabrina Meng as its latest rotating and acting chair. The vendor cycles its acting chair position through its board of directors, with each member serving a six-month term. Meng, who also goes by the name Wanzhou Meng, took on that position April 1, replacing outgoing chair Xu.

Meng is the daughter of Huawei founder Ren Zhengfei and has been a central figure in Huawei’s ongoing battle with the United States. She was apprehended by Canadian authorities in late 2018 at the request of the U.S. government, and later charged by the U.S. Department of Justice with financial fraud and violating sanctions.

Specifically, the U.S. government charged Meng, Huawei and a pair of Huawei subsidiaries with orchestrating millions of dollars in transactions with Iran that violated sanctions placed on the country. Those activities relied on global banking relationships to launder money from the sale of equipment made to Iran through Huawei subsidiary Skycom.

Huawei and its U.S. subsidiary were also accused of obstructing an investigation into those activities that the U.S. government began in 2016. This included moving employees that were aware of the Iranian activities back to Huawei’s offices in China and destroying evidence that was in the U.S.

Meng was held by Canadian authorities for three years, and eventually appeared in a federal district court in New York City where she admitted to the charges as part of a plea deal. Those charges were summarily dropped against her and she returned to China in late 2021.