Huawei posts increase in 2018 earnings despite criticisms

Earnings surge 25 per cent in 2018 even amid security concerns related to the telecoms giant's operating systems

SHENZHEN, CHINA - MARCH 29: GuoPing, Huawei's Rotating Chairman, speaks during a Huawei's 2018 Annual Report at Huawei Technologies Co. headquarters on March 29, 2019 in Shenzhen, China. Huawei, the worlds largest telecommunication equipment maker, reported on Friday its annual profit rose 25% to 59.3 billion yuan ($8.7 billion) despite being at the center of global scrutiny. (Photo by Billy H.C. Kwok/Getty Images)
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Huawei's earnings soared by 25 per cent in 2018, even amid unconfirmed concerns that its equipment is not totally secure.

The telecoms manufacturer's revenues grew nearly 20 per cent, crossing the $100 billion mark for the first time, the company reported on Friday. Revenue for the year reached more than 721bn Chinese yuan ($107bn), while the company reported an earning of 59.3bn Chinese yuan ($8.8bn).

Shenzhen-headquartered Huawei is aiming to boost its incomes further with 2019 seeing a widespread roll-out of the 5G network globally.

“We expect more large-scale deployment of 5G in 2019. It will enable broader connectivity ... that will create huge opportunities,” said Guo Ping, Huawei's rotating chairman, at a media briefing on Friday.

Huawei launched its 5G-enabled smartphone last month at the Mobile World Congress in Barcelona. It also exports 5G hardware and infrastructure to many countries and the company has secured more than 25 5G commercial contracts.

The company posted its earnings a day after a UK watchdog issued a warning over the security concerns allegedly posed by the telecoms giant. The National Cyber Security Centre (NCSC) - part of the UK intelligence-gathering body, Government Communications Headquarters (GCHQ) - said Huawei has failed to address security flaws in its equipment and systems.

In its report, released on Thursday, NCSC said that it is “difficult to appropriately risk-manage future products, until Huawei’s cyber security processes are remediated”.

Huawei has confirmed it will spend $2bn to address the UK’s security concerns.

UK telecoms firm BT has barred Huawei 5G equipment from its core network. Australia and New Zealand have also announced that they will not allow Huawei to be involved in building the next generation 5G systems in their countries.

Earlier this month, Huawei filed a lawsuit against the US government, challenging the constitutionality of an American law that restricts the Chinese company from doing business in the country.

On March 1, the chief financial officer of Huawei, Meng Wanzhou, also filed a prosecution against the Canadian authorities alleging she was wrongfully detained and her constitutional rights had been violated.

The US is pursuing criminal charges against Huawei and Ms Meng, including alleged money laundering, bank fraud, stealing trade secrets and violating US trade sanctions against Iran. Ms Meng, who was arrested in Canada on December 1, and Huawei have denied any wrongdoing.