Huawei navigated its “new normal” of geopolitical headwinds during the first half of the year to a degree of financial success, and despite those market challenges it wants to maintain communication channels.

The China-based vendor was light on specific fiscal details for the first half of the year, with a spokesperson noting Huawei only provides more detailed numbers as part of its annual reporting. What it did report was a 3.1% year-over-year increase in revenues for the first half of 2023, with its information and communication technology infrastructure business contributing more than half of its total revenues.

Those results were better than what Huawei reported as it exited last year, when the vendor stated it was operating in “crisis mode” due to its long-running battle with some Western governments. However, the vendor at that time was steadfast that it would regain a semblance of operational normalcy in 2023 despite those struggles.

Market rankings indicate the vendor has been able to maintain its competitive position.

A recent Dell’Oro Group report on the global radio access network (RAN) market noted that Huawei remained the world’s largest RAN vendor, though it dropped to the No. 3 position when taking its home country out of the equation. A different Dell’Oro Group report placed Huawei No. 1 in worldwide RAN sales specific to the private wireless market over the past year.

Andy Purdy, chief security officer for Huawei, in an interview with SDxCentral on the latest results explained the vendor has found a new operating rhythm.

“We've kind of settled into what we've referred to as our new normal given some of the limitations that we have and our need to move forward,” Purdy said.

The U.S.-based executive highlighted Huawei’s “heavy investment” in research and development, which included work from approximately 114,000 employees and an investment of 25% of Huawei’s 2022 revenues.

“It's a gigantic commitment and it's really helping us in those areas that we see as the present and the future of digitalization, intelligence and decarbonization moving into the fourth industrial revolution,” he added.

U.S. impacted by ‘toxic political environment’

That operating rhythm also includes a minimal amount of interaction with the U.S. market.

“For our business in the United States, our business has basically gone away because of the restrictions on the ability to sell, the limitations on the ability of the American semiconductor industry to sell to us and other China-based companies,” Purdy said. “Our focus was not a priority for the United States; now we’re focusing on those countries that are interested in having us, where their partners are going to partner with us.”

Purdy explained that this ongoing challenge in the U.S. has resulted in Huawei not having any discussions with telecom operators in the U.S. “or trying to plan ahead for something when the impact of the United States on the rest of the world is a continuing issue.”

“When you've got people disagreeing, when you've got a toxic political environment, it makes it really challenging,” he added.

Purdy did note that despite that toxicity, Huawei remains interested more broadly in maintaining dialog, with a specific focus on … wait for it … cybersecurity concerns.

“We have the opportunity to try to communicate the kinds of things that could potentially be of the greatest value in the United States, in terms of competitiveness economically, the rollout of technology, priority, and trying to help the industry sectors have an idea of what's happening,” Purdy said. “[In] my role as CSO, tracking what's happening in the United States regarding cybersecurity, privacy protection, what's necessary — that's very important as we share, and I have conversations with different colleagues in Europe. … There's a lot of great things happening in the United States in terms of raising the requirements for cybersecurity – not quite as much for privacy – so that we can take those lessons and make sure that our colleagues in other countries and their potential customers have an idea of some of these things. And then they can continue to make the case that there needs to be the strengthened cybersecurity privacy requirements or needs to be transparency, standards-based accountability.”

There is also a selfish nature to this as Purdy added this “helps our customers make a strong case that we can be trusted and that you can't just think about the world in terms of where our company is based. You need to look at the risks in the world because they're very great.”

European challenges remain

The opportunity for discussions in Europe come at a critical time.

The European Union recently strengthened its stance on banning the use of 5G telecommunications equipment from China-based vendors like Huawei and ZTE and could restrict funds for member states that fail to implement a ban.

EU Commissioner Thierry Breton wrote in a statement that his office is now officially backing those member states that have moved to remove “high-risk suppliers” from their telecommunication networks. That backing is through “a communication confirming that the decisions taken by certain member states to restrict or exclude completely Huawei and ZTE from their 5G networks are justified and in line with the toolbox.”

That “toolbox” was introduced by the EU in early 2020. The extensive document explained that member states agreed to “strengthen security requirements, to assess the risk profiles of suppliers, to apply relevant restrictions for suppliers considered to be high risk, including necessary exclusions for key assets considered as critical and sensitive — such as the core network functions — and to have strategies in place to ensure the diversification of vendors.”

However, it stopped short of directing member states to take specific measures to prevent high-risk vendors from participating in 5G build-outs. This was left to member states to decide.

The EU Commission produced a second report for its 5G security toolbox that furthers its efforts. Breton also said the EU Commission would continue to work with member states that have not officially adopted the toolbox, and that the commission itself will implement the toolbox for its own procurement of telecoms services “to avoid exposure to Huawei and ZTE” and take into account the adoption of the toolbox when allocating EU funding.

“We have been able to reduce or eliminate our dependencies in other sectors, such as energy, in record time, when many thought it was impossible. The situation with 5G should be no different: we can’t afford to maintain critical dependencies that could become a ‘weapon’ against our interests,” Breton wrote. “That would be too critical a vulnerability and too serious a risk to our common security. I therefore call on all EU member states and telecom operators to take the necessary measures without further delay.”

Deutsche Telekom CEO Timotheus Hottges did recently state that the German telecom giant did not have any potentially banned equipment in its core infrastructure, but there was a piece of equipment in its RAN infrastructure “where maybe the security authorities might have a change, which is the configuration management and we are on the way of becoming independent here as well.”

Purdy previously told SDxCentral that similar to Huawei’s desire for open dialog in the U.S., the vendor also wants to maintain those channels in Europe.

“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, and the emphasis on greater transparency for both cybersecurity and privacy and greater accountability.”