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GEORGE ZHANG, HUAWEI:"We are counting on stable relationships and free competitiveness in Romania"

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"We are counting on stable relationships and free competitiveness in Romania"

Chinese giant Huawei is confident that Romania will not ban the company's access to the 5G call for tenders and advises the Romanian Government to speed up its organization because otherwise it would lose the advantage we currently have.

After the cancellation of the Mobile World Congress (MWC) - the biggest reunion of the telecommunications industry - following the concerns caused by the coronavirus epidemic, Huawei wants to present its new technology innovations in a road show across the European Union.

George Zhang, CEO of Huawei Romania, gave us an interview in which he approached topics such as the impact of the coronavirus epidemic, the postponing of the 5G auction, the evolution of the Romanian market, as well as the anti-Huawei campaign waged by the USA.

"We believe that in 2020 the Romanian Government will give the green light to the 5G auction" "We are considering the beginning of a road show, a mini-Mobile World Congress" "If you remove Huawei from the Romanian market, you need to find players with a clout of 2.6 billion Euros"

Reporter: Is the Romanian legislation successful in ensuring the support needed for the business of Huawei?

George Zhang: Yes, we are counting on our relations with the Romanian government. In addition, Huawei has already implemented full functionality not only for its own business, but also for technical support in various branches of the industry. The company has major investments in Europe. When looking at the number of employees, Huawei Germany is the largest, and Huawei Romania is the second largest, with over 2000 employees. As shown by the Oxford Economics report, the investments made by Huawei provide benefits to the entire industry and indirectly to the whole supply chain. From that point of view, we are counting on stable relations and on free competition. We expect to see continuity.

Reporter: How do you see the postponement of the 5G call for tenders in Romania?

George Zhang: I think that the 5G is a very important engine for the digital economy, especially since the global economy and the European one in particular has slowed down, due to various reasons. Romania should strive to keep the advanced status it has in this sector. Romania is currently in the top part of countries with fast internet at a very attractive cost.

The delay of the implementation of 5G is not a very good idea. We encourage the government to be careful, and for the 5G call for tenders, which is already late, to be opened. If we look at other countries in Europe which have already launched the 5G services, we are seeing an increase in use cases, as well as of the GDP. 5G doesn't just connect smartphones, but also cars, vehicles and Internet of Things (IoT). Because of some instability on the political and economic side, we have no estimate for the 5G call for tenders, but I can say that we are ready to create new opportunities. Huawei is a leader on this industry and we are confident when it comes to our offers and solutions.

Reporter: What will be the main benefits of the 5G implementation in Romania?

George Zhang: 5G brings benefits beyond the mere connection to the internet, it will come up with significant changes in every sector. 5G brings with it a digital transformation applicable vertically in various industries, including in transportation, energy, manufacturing. Based on these transformations and on the fact that Huawei is beginning to introduce operating systems which connect IoT systems, we are seeing a very high potential and new opportunities based on the 5G technology. This new technology will open a new potential for all the small medium and even large companies, and for startups.

Reporter: How do you see the US' attempts to exclude the Huawei equipment from the construction of 5G networks in Europe?

George Zhang: The US is a rich country. I am saying that because we have some reports hat the US government has created a project to create a 1 billion dollars fund to remove and replace Huawei on its market. We are seeing that some European countries would want to follow their example, but doing so will have a very high financial impact. First of all, it needs to find a very strong financial support to replace one of the most important players on the market. We rely on the same principle which the US relies on, if you remove Huawei from the Romanian market you need to find players with a clout of 2.6 billion Euros, which is just the direct impact, and if we are talking about the indirect impact on the economy, and after the implementation of 5G, that amount triples. Secondly, the removal from the market Huawei will create a very bad perception among investors, especially the private ones, who will be wondering how they can protect their existing investments and what guarantees they can still have for the future of their business and the potential of their investments. Because of these two reasons, I don't think that there is the risk of Huawei being banned in Romania. We are contributing a lot to the country's economy and we respect our partners.

Reporter: Is Huawei's business affected by the coronavirus?

George Zhang: We have communicated a lot through videoconferences and audioconferences with our colleagues all over the world. As far as Huawei is concerned, in China, we have our own healthcare system and even a bureau that handles our protection. Huawei employees have been completely protected and our operations have unfolded safely. Everyone has resumed work. There is, however, an impact caused by our partners and suppliers in China. Some of them haven't completely resumed their activity. We wish for these difficult times to go away as soon as possible and for everyone to resume the normal course of life as soon as possible.

Reporter: What surprises did Huawei have planned for the Barcelona fair - MWC?

George Zhang: As we know, Mobile World Congress (MWC) organizers have decided to cancel this year's edition due to fears about the coronavirus epidemic and we respect this decision. Huawei will continue to communicate with its customers and present its latest technologies and products through different channels. We plan to start a tour, a mini-Barcelona road show. We have already designed the cars and we will start this spring, probably from April, to present a kind of mini MWC that will travel throughout the European Union and will present locally the new advanced technology solutions of the company.

Reporter: What was the company's market share last year and what are your estimates for the current year?

George Zhang: If we are talking about the market share in smartphones, Huawei has maintained its already created image in 2019. In the Christmas and New Year campaigns, Huawei's market share has increased from 23% to 25%. This growth gives us confidence, especially since Mate 30 is now on sale, both in our stores and our partners. Our data shows great interest from customers, who are very pleased with Huawei.

This year we will be presenting the new Huawei operating system on the market, as a matter of fact Mate 30 is the first in the series which uses that system and according to our plan, we will have the launch of the P40 series in April - May. We are confident in our products and on a global level, Huawei has succeeded in passing a volume of 214 million phones sold, a greater number compared to 2018. All of the above shows us that Huawei is a brand that is well-known and respected all over the world. That gives Huawei confidence to introduce more lines of products on the market, including the Harmony OS system dedicated to smart screens. We think that there are better things waiting for us from now on.

Reporter: Last year, Huawei saw growth on the enterprise segment. What do you think will be the main sector for growth this year?

George Zhang: We are still seeing potential for growth on the enterprise segment and we are hoping that 5G technology grows. We were hoping the call for tenders for 5G in Romania would be held in 2019, but unfortunately it has been postponed. We believe that in 2020 the Romanian government will greenlight the call for tenders and we will have free competition, like we had over the last few years.

Reporter: What was the company's market share last year and what are your estimates for the current year?

George Zhang: The group's turnover for last year hasn't been determined yet, our numbers are still being audited by KPMG. I can tell you that our estimates show that in 2019 we have reached a global level of approximately 120 billion dollars, up 10-15%. For 2020, our target is to see growth, and aside from that we have planned the launch of a new business group centered around the Cloud and AI which will be exported globally.

Locally, the results of Huawei Romania for 2019 are similar to those of 2018. The initial business plan was to target the 5G tender, which I thought would be completed in 2019 and that some revenue and sales would come from that, but we hope it will take place this year.

Reporter: Thank you!


Huawei, the world's biggest maker of telecom equipment and one of the leaders of the 5G telecommunications industry, had a contribution of 219 million Euros to Romania's GDP in 2018, according to a study made by Oxford Economics at the company's request. Out of that amount, 128 million Euros was a direct contribution, through the workforce, the profit generated by that workforce on a nationwide scale; 35 million Euros in indirect contributions through the distribution ad 60 million Euros indirectly through the reentry of the wages paid by Huawei to its employees into the economy, through shopping and other forms of spending. In total, the contribution of Huawei to Romania's GDP has increased 20% a year on average, between 2014 and 2018, taking the inflation into account as well. Over the same period, the number of employees supported by Huawei has increased 15% on average from one year to the next, and taxes paid have increased 11% a year. In total, the Romanian subsidiary of the Chinese companies has about 2200 employees and supports another 1375 on the distribution chain, in total 6320 people. According to the company, 80% of its employees are Romanians.

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