ABSTRACT

This project report entitled to “A study on financial performance of Huawei honor” at china.
The main objective of the study is to analyse the financial position of the company. It the of
identifying the financial strength and weakness of the firm properly establishing relationship
between the item of balance sheet and profit and loss account. The details regarding the history
and finance details of the company were collected through discussion with the company
officers, secondary data on the annual report of 2014-2018.

INTRODUCTION
Huawei Technologies Co., Ltd.
During the 1980s, Chinese government tried to modernize the country's underdeveloped
telecommunications infrastructure. A core component of the telecommunications network was
telephone exchange switches, and in the late 1980s several Chinese research groups
endeavoured to acquire and develop the technology, usually through joint ventures with foreign
companies.

Established in 1988, Huawei Technologies is a high-tech enterprise which specializes in

research and development (R&D), production and marketing of communications equipment,
providing customized network solutions for telecom carriers in optical, fixed, mobile and data
communications networks. Huawei's contracted sales in 2003 reached 3.83 billion USD, an
increase of 42% year on year. Huawei’s products can be divided into the following categories:
fixed network, mobile network, data communications, optical network, software & services
and mobile terminals. Huawei products are based on its independently designed ASIC chips.
Its ASIC designing capability is among the most advanced in this field worldwide. This allows
Huawei to consider the needs of its customers from start to finish, from the chip to the network.
This experience is invaluable as Huawei expands its penetration into the international market.
Huawei's consultants on employee stock option plan, human resource management, financial
management and quality control.

NEEDS AND IMPORTENCE

Financial performance is a subjective measure of how well a firm can use assets from its
primary mode of business and generate revenues. This term is also used as a general measure
of a firm's overall financial health over a given period of time, and can be used to compare
similar firms across the same industry or to compare industries or sectors in aggregation.

A company’s financial statements provide various financial information that investors,

creditors and analysts use to evaluate a company’s financial performance. Much of the
information presented in a financial report is required by law or by accounting standards.
Financial statements are important company management as a means of communicating past
successes as well as future expectations. By publishing financial statements, management can
communicate with interested outside parties about its accomplishments running the company.

A company’s financial conditions are of a major concern to investors and creditors. As capital
providers, investors and creditors rely on a company’s financial conditions for both the safety
and profitability of their investments. More specifically, investors and creditors need to know
where their money went and where it is now. The financial statement of balance sheet addresses
such issues by providing detailed information about a company’s asset investments. The
balance sheet also lists a company’s outstanding debt and equity components, and so debt and
equity investors can better understand their relative positions in a company’s capital mix.

For most small-business owners, analysing financial statements might seem overwhelming.
While many business owners might outsource the creation of financial statements to an
accountant, learning to analyse them helps determine the financial health of the company.
Financial statements should be analysed once a year.

OBJECTIVES

The objective of financial performance is to track, analyse and report your business’ income.
The purpose of these performance is to examine resource usage, cash flow, business
performance and the financial health of the business. This helps the investors make informed
decisions about how to manage the business.

There are three main objectives of financial performance:

1. Provide information to investors:

Investors will want to know how cash is being reinvested in the business, and how
efficiently capital is being used. Financial reporting helps investors decide whether your
business is a good place for their cash.
2. Track cash flow:
Where is your business’ money coming from? Where is it going? Is the business making
a profit or a loss? These answers are important to know – they show how well your
business is performing, and whether it can cover its debts and continue to grow.
 3. Analyse assets, liabilities and owner's equity:
By monitoring these, and any changes to them, you can work out what to expect in the
future, and what you can change now to prepare. This also shows the availability of
resources for future growth.

Financial performance adhere to a group of taxation, accounting and legal requirements, called
the International Financial Reporting Standards. This is so a business’ finances can be
understood all over the world – a necessity with the increase of global companies and
international shareholders.

METHODOLOGY

Methodology is about anything that has to do with procedures or techniques of investigation,

that is, the set of techniques used in one piece of research. It is all about the methods used in
the study of the research. Methodology is essential in gathering relevant information thereby
giving effective and reliable representation. Is possible to categorize different research method
approaches into two main categories depending on how they are conducted, quantitative
research methods and qualitative research methods. The research approach for the research
study is “Descriptive Research” by using quantitative method.

The methodology of this research is broken down into the following framework-

1. Research design.

2. Data collection.

3. Population and sample.

3.1 Research Design:

A detailed outline of how an investigation will take place. A research design will typically
include how data is to be collected, what instruments will be employed, how the instruments
will be used and the intended means for analyzing data collected.
A research design is the document of the study. The design of a study defines the study type
(descriptive, correlational, semi-experimental, experimental, review, meta-analytic) and sub-
type (e.g., descriptive-longitudinal case study), research question, hypotheses, independent and
dependent variables, experimental design, and, if applicable, data collection methods and a
statistical analysis plan. Research design is the framework that has been created to seek
answers to research questions.

This study focuses on the relationship between Huawei Mobile Phone marketing strategy and
customer satisfaction. The research approach for the research study is “Descriptive Research”.
Descriptive research is a study designed to depict the participants in an accurate way. More
simply put, descriptive research is all about describing people who take part in the study.

There are three basic types of Descriptive research. These are -

1. Observational Method

2. Case Study Method

3. Survey Method

3.2 Data Collection:

Both primary and secondary data sources were used to ask research questions. In order to
prepare the questionnaire, first, supervisor‟s views were elicited and then the research
questionnaire was finally revised. Data were collected from user who are using mobile phone.

For the purpose of this study, the collected secondary data included: textbooks, academic
articles and journals related to the service quality and customer satisfaction. This type of data
collection was mainly used for the literature review since it was unable to meet the research
objectives.

3.2.1Questionnaires:

A questionnaire is a research instrument consisting of series of questions and other prompts

for the purpose of gathering information from respondents. Most often it is designed for
statistical analysis of the responses[ http://en.wikipedia.org/ wiki/Questionnaires], and last
assessed 25/11/08. According to Sekeran, (2003), „a questionnaire is a pre-formulated written
set of questions to which respondents‟ records their answers, usually within rather closely
defined alternatives‟.
A questionnaire was structured for this research and was administered to the user of Huawei
mobile phone. The choice of the questionnaire as one of the means of gathering data is borne
out of the fact that it is cheap, do not require as much effort from the questioner as verbal or
telephone surveys, not time consuming and often have standardized answers that make it
simple to compile data. It allows the respondents to supply answers that are confidential to
them (Sekeran, 2003).

These questionnaires were handed directly to the respondents by the researchers which gave
the researchers the privilege to introduce the topic and encouragement in answering the
questionnaire. The questionnaire consists of two sections, which focuses on the areas of
interest of the research.

 The first section relates to the demographic.

 The second section relates to the marketing strategy.

3.3 Population and Sampling:

Sekaran (2003) describes sampling as the process of selecting a sufficient number and the right
type of elements for study from a certain population. As population is defined, the entire group
of elements that the researcher is interested to investigate. An element on the other hand, is a
single member of the population (Jankowicz, 1991). Sample is defined as a portion or subset
of the population, the size of which is determined by the type and objective of the study, as
well as time and financial constraints (Fink, 1995).

Samples were drawn from the entire population of study in this research due to time, financial
and human resource constraints, thus it is believed that the sample will provide the researchers
with more reliable results (Sekaran, 2003; Blumberg et al 2005).

http://en.wikipedia.org/wiki/Questionnaires

3.4.1 Population and Sample Size:

The population of study was the users of Beijing, China. The researcher chooses China because
China is the big electronic market. The permanent population of China's capital of Beijing was
21.7 million by the end of 2015. To find out the calculation of sample size researcher use
sample size calculator by Creative Research System.Research data were collected using the
simple random sampling method. Assuming a 95% confidence interval and e = 10% margin
of error, the sample size is calculated as n=96 (Kurtuluş, 2004: 187). The sample size is 96
after the calculation is given in figure 2.

http://www.surveysystem.com/sscalc.htm

The population of study was drawn out of the users of Beijing, China. A total of 180
questionnaires were administered and 98 were returned. After eliminating 8 questionnaires
because of incompleteness, 90 useful questionnaires were obtained, yielding a 50 per cent
response rate. Considering the issue of the sample size when conducting more complex
statistical analysis, the sample of 90 valid questionnaires deemed satisfactory.

Who is Huawei?

Founded in 1987, Huawei is a leading global information and communications technology

(ICT) solutions provider. We provide telecom carriers, enterprises, and consumers with
competitive ICT solutions, products, and services.

We work in more than 170 countries and regions, serving over one-third of the world’s
population. Among our 180,000 employees, there are more than 160 different nationalities
with a localization rate of almost 70%.

What do we offer the world?

We create value for our customers. Together with telecom carriers, Huawei has built more
than 1,500 networks, helping connect over one-third of the world’s population. Together with
our partners, we serve government and public utilities, as well as enterprise customers in
sectors like finance, energy, transportation, and manufacturing. We help organizations and
industries go digital by providing them with open, flexible, and secure ICT infrastructure
platforms that promote greater synergy between devices, networks, and the cloud. We also
provide enterprise customers with stable, reliable, and secure cloud services that evolve with
their needs. With our smartphones and other smart devices, we are improving people’s digital
experience in work, life, and entertainment.

We promote industry development. Huawei advocates openness, collaboration, and shared

success. Through joint innovation with our customers, partners, and peers, we are expanding
the value of information and communications technology in service of a more robust and
symbiotic industry ecosystem. Huawei is an active member of more than 360 standards
organizations, industry alliances, and open source communities, where we work together on
mainstream standards and lay the foundation for shared success. We have also joined forces
with industry partners to innovate in emerging domains like cloud computing, software-
defined networking (SDN), network functions virtualization (NFV), and 5G. Together, we are
driving the industry forward.7

We drive economic growth. Huawei generates tax revenues, provides local employment
opportunities, and stimulates the development of the ICT value chain in every country where
we operate. Furthermore, we deliver innovative ICT solutions that drive the digital
transformation of all industries, fostering economic growth and greatly improving quality of
life.

We enable sustainable development. As a responsible corporate citizen, Huawei has made a

significant contribution to bridging the digital divide, leaving our mark in places as remote as
Mount Everest and the Arctic Circle. We are keenly aware of the importance of
telecommunications in emergency response situations. Having faced Ebola-affected areas in
West Africa, nuclear contamination after the Japanese tsunami, and the massive earthquake
that struck Sichuan, China, we hold fast to restore communications networks and ensure the
reliable operation of essential telecoms equipment in disaster zones. To further promote
sustainability, we prioritize low-carbon and environmental protection throughout all planning,
design, R&D, manufacturing, delivery, and O&M activities, providing our customers with top-
of-the-line products and solutions that save energy and reduce environmental impact. As for
people, we help develop the next generation of local ICT talent with our global Seeds for the
Future program, where we work with young talent across 108 countries and regions to transfer
knowledge, cultivate understanding and greater interest in the ICT industry, and encourage
broader involvement in the digital community.

We provide dedicated people with a strong growth platform. Inspiring dedication is one of
Huawei’s core values, and it manifests itself in many ways. We assess employees and select
managers based on their contribution, as well as the extent of their responsibilities. We provide
our teams with a global development platform, giving young team members the opportunity to
shoulder greater responsibilities and accelerate their careers. In this way, we have enabled over
100,000 Huawei people to yield ample returns and gain memorable life experience.

What do we stand for?

For the past 30 years we have maintained an unwavering focus, rejecting shortcuts and easy
opportunities that don’t align with our core business. With a practical approach to everything
we do, we concentrate our efforts and invest patiently to drive technological breakthroughs.
This strategic focus is a reflection of our core values: staying customer-centric, inspiring
dedication, persevering, and growing by reflection.

The digital era has been generous. We will make the most of this historic opportunity, and
boldly forge ahead to build a fully connected, intelligent world.
Message from the Rotating and Acting CEO

As we embark on a new journey of

growth and transformation, our vision and
mission are clear: We will bring digital to
every person, home and organization to help
build this fully connected, intelligent world.

Our new journey:

Building a fully connected, intelligent world

Huawei is entering a new stage of development. Through ongoing innovation in technology

and business, we have what it takes to create greater value for our customers – and for society
as a whole.

This new stage of development is the product of a rapidly evolving world where technology
changes in the blink of an eye. From billions of devices for human use to ubiquitous industrial
sensors, when all things have the ability to sense and perceive, the boundaries between the
physical and digital worlds will dissolve, producing an endless surge of data.

This shift from connecting people to connecting all things will give rise to new possibilities in
large-scale data analysis and application. With cloud data centers spanning the earth and
pervasive edge computing, ambient intelligence will turn data into new business opportunities.
It will drive innovation in applications across all industries, helping them unleash their full
potential.
Emerging technology is propelling the world forward, driving nonstop change in consumer
preferences and business needs. New experiences and business models are popping up all
around us, and with them, a whirlwind of opportunities and challenges.

At the heart of this change is the evolution of information and communications technology,
which has grown from a simple vertical industry to a broad enabling platform that serves
society as a whole. ICT is the primary force behind the digital and intelligent transformation
of industry, and it’s the catalyst of a new industrial revolution. It will eventually open the doors
to a fully connected, intelligent world.

Huawei will lead the way across this threshold, not just embracing change, but innovating
ahead of it. We will help the world go digital. We will help it go intelligent. And we will seize
new opportunities along the way.

As we embark on a new journey of growth and transformation, our vision and mission are
clear: We will bring digital to every person, home and organization to help build this fully
connected, intelligent world.

To do this, we will create greater value for our customers, build better platforms for our
partners, provide our employees with more opportunities, and promote the balanced growth of
communities the world over. We will work hard to ensure that the fruits of innovation are
readily available to all people, all homes, and all organizations. We will do our part to promote
economic growth that is not only sustainable, but inclusive, and challenge ourselves to generate
more substantial value for society.

Our focus: ICT infrastructure and intelligent devices

Huawei is doubling down on its investments in technology, but we are doing so with focus.
We are clear about what we do and what we don’t do, which gives us the space we need to
build our strengths in areas that hold strategic value for our customers. We will continue to
lead the development of core technology and consolidate our core strengths. We are digitizing
our own business; in doing so, we can more effectively enable the digital transformation of all
industries.

Building ubiquitous connectivity. In addition to connecting people, our digitization efforts

are shifting towards the industrial IoT. Through advancements in technology like 5G, we are
helping telecom networks connect more people, more homes, and more organizations.
Ultimately, we aim to position telecom networks as the basic infrastructure of the digital world.

On the standards front, we are working to drive consensus between the ICT industry and other
verticals to bring the benefits of general-purpose connection technology to more domains. We
aim to replace proprietary protocols and technology for local area networks with open
frameworks and standards that can be shared between all industries. This will enable greater
synergy between different sectors and serve as the basis for a new digital industry ecosystem.

Creating a better experience with broadband. Video is playing an entirely new role in the
digital transformation process. As the richest means of sharing data, its applications know no
bounds.

A thriving video industry is essential to push broadband requirements to a new level, and create
more room for growth. We believe that video is the key to growing and monetizing telecom
networks, and we are helping our carrier customers succeed in this market by providing the
network infrastructure they need to deliver the best possible video experience.

In the industry video market, we are developing video-based production systems for a key
group of domains, such as public safety, where video is the primary vehicle of digital
transformation. Video is growing to become a core means of perceiving and collecting
industrial data. We are helping different industries connect their video systems to networks,
and providing intelligent analysis in the cloud to help them transform their core business
processes, share data, and open up their business channels.

Developing open, trusted cloud platforms. Cloud services are rapidly becoming a basic
business model for all companies around the world. Huawei is no exception. We provide cloud
services, and we help customers and partners develop and monetize their own.

On one end of the spectrum, we are leveraging a strong portfolio of products and solutions to
help carriers and other companies evolve their networks to AllCloud ICT infrastructure. On
the other end, we’ve condensed three decades of technological expertise into a solid set of
public cloud services for companies of all shapes and sizes. From start to finish, we hold true
to three basic principles: We won’t monetize customer data, we won’t develop industry
applications, and we won’t make equity investments in application partners.
We’re giving it all we’ve got to become the preferred partner for enterprises looking to migrate
their data and applications to the cloud. At the same time, we’re forming cloud alliances with
carriers around the world to help enterprise customers deploy their own services on a global
scale.

Growing an experience-centric device ecosystem. We will soon see an explosion in device

innovation, where intelligent devices will become more tightly intertwined with our everyday
lives. In Huawei’s device business, everything we do revolves around consumer needs and
expectations. We center our efforts on product innovation, mobile services, channel
transformation, and customer service to improve experience across the entire customer
journey.

Meanwhile, we’re actively experimenting in domains like artificial intelligence, virtual reality,
and augmented reality, and consolidating our strengths in the synergy between chips, devices,
and the cloud. Ultimately, we aim to deliver an intelligent, immersive experience across all
user scenarios and, in doing so, stand out as an iconic global tech brand.

As our consumer base grows in diversity, we need to adopt a more open approach to
innovation. With mobile phones at the center of our portfolio, we are working to cultivate a
broader ecosystem that delivers an intelligent experience across all scenarios, including smart
homes, health and fitness, tablets, and PCs. We will strengthen our platforms to provide better
support for upper-layer applications, and inspire a greater number of developers and partners
to deliver a user experience that is both intuitive and personal.

Enabling ambient intelligence. Artificial intelligence is a basic enabling technology that can
be used in nearly every aspect of every organization. At Huawei, our approach to AI is two-
fold. Internally, we use AI technology in our IT, finance, and supply chain departments to
improve the efficiency and quality of our operations. Externally, we integrate AI with the
products and solutions that will benefit the most. This includes intelligent network O&M, safe
cities, intelligent cloud services for enterprises, and intelligent chips for devices. We use
artificial intelligence to create practical value for our customers, which is what makes
Huawei’s solutions stand apart from all the rest.
 2017: Creating value, driving growth

Revenue

603,621

CNY Million

15.7% YoY

Net profit

47,455

CNY Million

28.1% YoY

Cash flow from operating activities

96,336

CNY Million

95.7% YoY
 Business highlights in 2017

Carrier business: Moving from the investment-driven to value-driven network construction

model

 We deployed over 500,000 base stations around the world, with more than 10 million
commercial connections, and worked with over 1,000 ecosystem partners to build the
ecosystem.
 We have signed over 350 NFV and 380 SDN commercial contracts around the world and
deployed more than 30 CloudAIR commercial networks with wireless air interfaces.
 We conducted 5G pre-commercial tests with over 30 leading carriers in more than 10 cities
around the world.
Enterprise business: Enabling digital transformation across all industries

 We continued to enhance product and solution innovations in cloud, big data, campus
networks, data centres, IoT, and other domains. We also worked to promote the extensive
application of our innovative products and solutions in smart city and safe city projects,
as well as in the finance, energy, transportation, manufacturing, and other sectors.
 We worked to build platforms for customer and partner platforms, cultivate a fertile
environment in which a robust ecosystem will grow, and build symbiotic relationships
founded on shared success.
 197 Fortune Global 500 companies – 45 of which are Fortune 100 companies – have
chosen Huawei as their partner for digital transformation.
Consumer business: Building a world-class smart device brand

 A synergy was created between our Huawei and Honor brands. In 2017, Huawei shipped
a total of 153 million smartphones (including Honor phones). We are firmly positioned
among the top three phone makers in the world.
 We released the HUAWEI Mate 10 – the first smartphone with an embedded AI chipset.
 Our global brand awareness increased to 86%. The number of consumers considering a
Huawei device in non-Chinese markets saw a year-on-year increase of 100%, which put
Huawei among the top three global vendors in this category for the first time.
Huawei Cloud: Building open, trustworthy cloud platforms

 Huawei set up a Cloud BU. Our cloud service portfolio consisted of 99 services across 14
major categories, including over 50 solutions.
 We launched the Enterprise Intelligence (EI) platform to deliver a one-stop AI platform
as services.
 We continued to build an open, collaborative cloud ecosystem that will thrive on shared
success. The total number of our cloud service partners has exceeded 2,000.

Business results by region

China

Based on ongoing 4G network rollout, sustained growth in the smartphone sector, and our
growing capabilities in enterprise and industry solutions, our revenue from the Chinese market
increased by 29.0% year-on-year.
Asia Pacific

Due to the accelerated pace of digital transformation amongst enterprises and a growing share
of the smartphone market, Huawei maintained its growth momentum in the Asia-Pacific
Region and our revenue increased by 10.3% year-on-year.

EMEA

Due to the accelerated pace of digital transformation amongst enterprises and a growing share
of the smartphone market, our revenue from Europe, the Middle East, and Africa (EMEA)
increased by 4.7% year-on-year.

Americas

In the Americas, affected by fluctuations in telco investment cycles in Latin America, Huawei's
revenue from this region decreased by 10.9% over 2016.
Message from the Chairs
We will stay customer centric and
focus on ICT infrastructure and
intelligent devices. We aim to
promote industry development
through technological innovation
and by meeting the needs of our
customers. Together with our
customers and partners, we will
keep exploring, innovating, and
working our way to an intelligent
world.

Over the past three decades, we have worked with our customers and industry partners to help
families stay in touch, to reunite long-lost friends, and to connect people around the world. We
have achieved a lot. By working together to connect the majority of people on the planet with
information and communications technology, we have effectively removed time and space as
barriers to sharing and human contact. Looking ahead, we will continue to expand the breadth
of connectivity between people, and between things.
Over the next two to three decades, we will enter an intelligent world where all things can
sense, all things are connected, and all things are intelligent. Huawei is committed to bringing
digital to every person, home and organization to help build this fully connected, intelligent
world. We will stay customer-centric and focus on ICT infrastructure and intelligent devices.

We aim to promote industry development through technological innovation and by meeting the
needs of our customers. Together with our customers and partners, we will keep exploring,
innovating, and working our way to an intelligent world.

Driving progress in the digital economy

Huawei is actively exploring ways to enable digital transformation and drive the growth of
digital economy in countries around the world. Throughout this process, we have discovered a
distinct spillover effect, in which the broader economic impact of ICT investment far exceeds
direct returns

for investors.

There are three types of spillover: spillover between different departments within an
organization, spillover between competing enterprises in the industry, and spillover between
upstream and downstream industries across the value chain. This spillover is instrumental to
national economic growth. In 2017, Huawei jointly released a Digital Spillover report with
Oxford Economics. The report shows that over the past three decades, a US$1 investment in
digital technology has led to a US$20 rise in GDP on average. It also shows that the long-term
return on investments in digital technology is 6.7 times that of investments in non-digital
technology, and that the growth of digital economy is 2.5 times that of global GDP.

The majority of countries around the world are coming to realize the massive economic
potential in digital technology. Many have already increased their investment in ICT
infrastructure and enabling applications. Initiatives like Industry 4.0 in Germany and Made in
China 2025 are noteworthy examples of this. More than 140 countries have released overall
plans for national ICT development.

The results of this can be clearly seen in Huawei’s Global Connectivity Index (GCI), which
measures the correlation between ICT investment and economic growth. The total index itself
grew by four points from 2015 to 2017, and it’s clear from our findings that the global digital
economy is expanding at a faster pace. However, we have also found that the growth of digital
economy is becoming increasingly imbalanced between countries. The gap is widening
between frontrunners and starters in ICT infrastructure adoption. There is also growing
evidence of a Matthew Effect, in which the nations with advanced ICT are generating more
prominent returns on their investment than their less advanced peers.

At Huawei, we are committed to helping all countries accelerate the growth of their digital
economy, regardless of their state of development. We leverage our ICT technology and
management experience to promote growth, enrich people’s lives, increase productivity, and
boost national competitiveness.

We consistently invest over 10% of our sales revenue in research and development to drive
ongoing breakthroughs in basic enabling technologies like 5G, cloud computing, artificial
intelligence, and the Internet of Things (IoT). We transform advanced technology into more
competitive quality products and solutions, and are building out an intelligent ICT platform
that harnesses the synergy between the cloud, networks, and devices to fuel the development
of digital economies around the world. Along with telecom carriers, enterprises, and other
partners across the value chain, we are training people up, developing local ICT capabilities,
and building out a global R&D network to help maximize the digital spillover effect. Together,
we are fleshing out local ICT ecosystems, helping them innovate better, promoting inclusive
growth, and ensuring sustainable development.

Bridging the digital divide

Bridging the digital divide is a nonstop effort at Huawei. By leveraging our core strengths, we
are working with our customers to narrow the gap in network connections, digital services, and
digital tool adoption.

Our products and solutions now serve nearly three billion people around the world, including
many in remote, underdeveloped regions. In Nepal, Huawei has partnered with a telecom
carrier to connect network blind spots all the way up to the top of Mount Everest, thereby
linking the region with the rest of the world. In Kenya, we have helped significantly reduce the
medical costs of over 200,000 people with digital clinic and telemedicine platforms. In
populous cities and vast rural areas, our Wireless to the X (WTTx) technology has lowered the
cost of last-mile broadband access by 75%, giving more people access to the Internet in
otherwise difficult-toserve regions. In addition to infrastructure, we are setting up training
centers and running joint learning programs to cultivate local professionals. These programs
help people improve their digital skills, and give every person, home, and organization access
to the benefits of the digital world.
Ensuring secure and stable network operations
In a world of digital economy, while new technologies create limitless opportunities, they have
also given rise to greater security challenges. We believe that we should build security through
innovation, enhance security through collaboration, and work together to shape a digital world
that everyone can trust. In the face of new demand and security risks, Huawei continues to
collaborate closely with all stakeholders to increase security capabilities, reduce the risks
inherent to information and communications technology, enhance our competitiveness in the
field of cyber security, and create greater value for our customers. We continue to consolidate
our practice in security engineering. We are building out an integrated security system based
on synergy between chips, devices, networks, and the cloud, establishing an end-to-end chain
of trust and deploying secure and reliable communications networks together with our
customers. In the meantime, we continue to strengthen collaboration with ecosystem partners
to build a healthy and sustainable security ecosystem. Together, we hope to get a better grip on
increasingly complex cyber security threats and ensure the secure and stable operations of
networks around the world.

Building a healthy and harmonious ecosystem

Huawei’s ecosystem philosophy emphasizes openness, collaboration, and shared success. We

work closely with upstream and downstream customers, as well as other partners across the
value chain, to build a healthy and harmonious ecosystem. To help standardize social
responsibility across our entire value chain, we incorporate social responsibility requirements
into our procurement strategy and practices, using our purchasing power to drive continuous
improvement among all of our suppliers. Furthermore, we stress the importance of localized
operations. We actively give back to the communities and countries where we operate, offering
new employment opportunities, driving economic development, and providing solutions for
education, healthcare, and disaster relief. Internally, we continue to inspire dedication by
providing our hardworking employees with prompt and competitive compensation. The health,
security, and benefits of our people are of the utmost importance.

We have been running our flagship CSR program – Seeds for the Future – for ten consecutive
years. This program is designed to help local communities cultivate the next generation of ICT
talent. As of 2017, we have deployed the program in 108 countries and regions across five
continents. In total, more than 30,000 students from over 350 universities have taken part.
Many exceptional students among them have since joined the ICT industry, and now contribute
to its development.

Our ongoing commitment to operational compliance

We conduct business with integrity, observing international conventions and all applicable
laws and regulations in the countries where we operate. This is the cornerstone of operational
compliance at Huawei, and has long been a core principle of our management team. Under the
guidance and oversight of top executives within the company, efforts to strengthen a culture of
operational compliance are ongoing. We have set up dedicated compliance and oversight teams
to further bolster management and oversight of our global business operations. Through
training, communications, performance appraisals, and accountability management, we
consistently reinforce awareness of laws and operational compliance among our employees at
all levels. Outside of the organization, we openly share our experience with our business
partners, giving them insight into our own path to developing a global compliance system.

In 2017, Huawei continued to strengthen compliance in multiple business domains, including

trade, cyber security, and data and privacy protection. By increasing investment in organization
and resources, we continue to learn from best practices in the industry to reinforce our
compliance system. We invited external consultants to review our compliance in key domains,
and actively walked relevant stakeholders through all of our compliance initiatives to foster
mutual understanding and trust. Through ongoing efforts to strengthen compliance and increase
transparency, Huawei continues to win the respect and recognition of more governments and
partners around the world.

Improving corporate governance

A sound corporate governance system is the cornerstone of sustainable development at Huawei.

It is also the basis of our long-term cooperation with external stakeholders. We continue to
optimize our corporate governance structure and related mechanisms, laying a solid foundation
for Sun Yafang Liang Hua Chairwoman of the Board Chairman of the Board (September 1999
to March 2018) (Since March 2018) ongoing customer centricity, sustainable business
development, and more effective management of internal and external risks.

In 2017, we made further progress in developing a forward-looking system of governance.

Specifically, we optimized the design of our governance organizations and positions. We
restructured the organization to meet the specific needs of different businesses and enhance
overall responsiveness to customer needs. In the meantime, we continue to delegate more
authority to business units, further standardizing and strengthening authority mechanisms.

On March 23, 2018, the Representatives’ Commission elected a new Board of Directors. As
the highest body responsible for corporate strategy, operations management, and customer
satisfaction, the board has the mission of leading the company forward.

Under the leadership of the new board, Huawei will stay customer-centric, continuously
improve the efficiency of our operations, and hone our competitive edge in a way that is both
responsible and sustainable. At the same time, we will make full use of our core strengths to
fulfil our social responsibility and make greater contributions to the world at large. Let’s make
the most of new opportunities that digital and to build a fully connected, intelligent world.
Intelligent transformation brings, and work together

Business Review in 2017

In 2017, the global economy saw some recovery and the ICT industry maintained
steady growth while undergoing a structural transformation. We maintained our strategic
focus, intensified efforts in improving operations quality, and created value for our
customers. Our annual revenue was CNY603, 621 million, up 15.7% year-on-year
 Based on ongoing 4G network rollout, sustained growth in the smartphone sector, and
our growing capabilities in enterprise and industry solutions, Huawei earned CNY305, 092
million in revenue from the Chinese market, up 29.0% year-on-year.

Due to the accelerated pace of digital transformation amongst enterprises and a

growing share of the smartphone market, we earned CNY163,854 million in revenue from
Europe, the Middle East, and Africa (EMEA), up 4.7% year-on-year.
Due to the accelerated pace of digital transformation amongst enterprises and a growing share
of the smartphone market, Huawei maintained its growth momentum in the Asia-Pacific
Region and achieved CNY74,427 million in revenue, up 10.3% year-on-year.

In the Americas, affected by fluctuations in telco investment cycles in Latin America,

Huawei’s revenue from this region decreased to CNY39,285 million, down 10.9% over 2016.

Carrier Business 2017

5G has entered the commercial deployment stage. The Internet of Things (IoT), video, cloud,
and other innovative technologies are seeing widespread adoption and reshaping every
industry. We will soon enter a fully connected, intelligent world. Carriers around the world are
embracing the digital wave by consolidating their strengths, constantly optimizing their
investment structures, and exploring new business domains.

Huawei is teaming up with partners to help carriers go beyond traditional boundaries in the
areas of capabilities, connections, business, experience, and partnerships, achieve business
success, and enable digitization of all industries, thus jointly creating a better future.
Better connections: Huawei is leading the commercial deployment of 5G, building All-Cloud
networks, and leveraging its strengths in cloud network synergy to deliver ubiquitous, high-
speed, reliable, intelligent, and agile connections to people, homes, and organizations.

Better business growth: Huawei focuses on typical business scenarios like video, home
broadband, personal communications, and IoT to help carriers increase the ROI and revenue
with effective business solutions.

Better experience: Huawei’s digital O&M solutions enable agile business and intelligent and
efficient operations. This helps carriers deliver a Real-time, On-demand, All-online, DIY, and
Social (ROADS) experience.

In 2017, revenue from our carrier business was CNY297,838 million, a year-on-year increase
of 2.5%. While experiencing fluctuations in telco investment cycles, we worked with our
partners and customers to keep up with the shift from the investment-driven to value-driven
network construction model, and helped carriers achieve new growth.

5G: We conducted 5G pre-commercial tests with over 30 leading carriers in more than 10
cities around the world. The performance of our networks far exceeded the requirements set by
the International Telecommunication Union (ITU). We worked with global partners in our X
Labs to explore future typical application scenarios that targeted individuals, households, and
verticals. We continued to work with the entire industry to lead 5G development and prepare
for the upcoming end to-end commercial deployment of 5G.

All-Cloud: We continued to advance our All-Cloud strategy. Huawei has signed over 350 NFV
and 380 SDN commercial contracts around the world and deployed more than 30 Cloud AIR
commercial networks with wireless air interfaces. These actions are leading efforts to make
All-Cloud networks a reality.

NB-IoT: 2017 marks the first year in which NB-IoT was commercially deployed. We deployed
over 500,000 base stations around the world, and the number of commercial connections
exceeded 10 million. We worked with over 1,000 ecosystem partners to build a thriving IoT
ecosystem, leading to monthly shipments of Boudicca NB-IoT chips that exceeded 1 million
units. All these achievements have contributed to a boost in industry application and
innovation, ushering in a golden age for IoT development.

Video: Video has become a basic service for carriers. In 2017, the number of fixed video users
of global carriers exceeded 190 million, and the number of active mobile video users reached
1.4 billion. In addition, over 100 carriers considered video as their basic service in 2017.
Huawei has delivered end-to-end video solutions, including visualized O&M tools and big
data-based precision marketing solutions, and established a broad video partner ecosystem. We
have helped carriers in China, Spain, Germany, Norway, Turkey, South Africa, Thailand, and
many other countries achieve business success.

Wireless Networks
In today’s world, everything that can be connected is connected, and mobile technology is
reshaping the world we live in. Huawei has put forward three basic capabilities that are
fundamental to future networks: Single RAN Pro, Mobile Cloud, and Wireless AI, helping
carriers rapidly and efficiently seize new business opportunities.

Huawei aims to make the most of existing networks by helping carriers identify and gain high-
value customers, develop high-value services, and ultimately increase revenue. Our ROI-
cantered precise network deployment approach helps carriers build high-value mobile
networks. We have put forward innovative solutions while considering industry policies and
reusing existing network resources. These solutions include wireless sites for all scenarios, the
wireless home broadband solution Wireless to the X (WTTx), and spectrum efficiency
improvement. All of these solutions help carriers improve their network efficiency and tap into
the potential of existing network assets, which are worth dozens of trillions of dollars.

In addition, we actively incubate new services based on 4.5G networks, and lead pre-
commercial testing for 5G. Our goal is to support future business success in 5G, and establish
a virtuous cycle of business growth and network rollout for carriers.

The freezing of 3GPP 5G Phase 1 standards has ushered in 5G pre-commercial deployment

worldwide. In 2017, we conducted 5G pre-commercial tests with over 30 leading carriers in
more than 10 cities around the world. This work was recognized and awarded as one of World
Leading Internet Scientific and Technological Achievements.

Huawei remains a leader in the deployment of 4.5G networks. By the end of 2017, we had
deployed over 120 4.5G networks worldwide, including networks for EE in the UK, Turk cell
in Turkey, True in Thailand, LG U+ in South Korea, Deutsche Telekom, and China Telecom.
Huawei advocates the continuous evolution of 4.5G. We help carriers continuously improve
the capabilities of their 4G networks and build LTE infrastructure networks that incubate a full
range of services and deliver a Giga experience. This also paves the way for the transition to
5G and maximizes the ROI of 4G networks.

WTTx has become a mainstream solution for providing home broadband access. By the end
of 2017, Huawei had deployed WTTx networks for more than 150 carriers, winning high
acclaim from Telefonica, Vodafone Spain, Deutsche Telekom, Orange, and other industry-
leading carriers. Based on 4.5G networks, the commercial use of WTTx services is increasing.
Ovum predicts that by 2020, wireless networks will provide broadband access services to 350
million homes around the world. WTTx is set to become one of the major revenue streams of
mobile carriers

Huawei pursues technological innovation on an ongoing basis to reduce the cost of network
rollout and ensure that more people can benefit from networks. We help carriers increase their
ROI in terms of capacity and coverage.

Our Cloud AIR solution maximizes spectrum efficiency, and our multi-channel and multi-
sector solutions maximize the capacity of existing sites.

Our innovative sites, including the integrated Tube Star solution for macro coverage, the
Polestar solution for urban coverage, and the Rural Star solution for low-cost, accurate
coverage in rural areas, help carriers deploy sites on-demand, and improve network coverage
in urban and suburban areas.

In addition, we work with industry partners to build site ecosystems in order to reduce the cost
of site acquisition and increase mobile broadband penetration in emerging markets.
 Fixed Networks
With the global broadband industry continuing to see steady growth, we unveiled our
commitment to providing “Premium Broadband”. We aim to help carriers fully improve
connection, service, and customer experiences, and achieve precise, value driven investment
and network deployment. This will allow carriers to seize new opportunities that are emerging
from broadband development.

In 2017, we partnered with carriers including Safaricom in Kenya, Pakistan

Telecommunication Company Limited (PTCL), PLDT in the Philippines, and Omantel in the
Middle East to implement the approach of value driven network deployment and jointly build
premium broadband networks. This has allowed these carriers to set themselves apart from the
competition and achieve business success

Targeting the cloud era, Huawei launched the Intent Driven Network Solution to help carriers
go digital. In the cloud-based network transformation and private line domains, Huawei worked
with China Mobile, China Unicom, Softbank, and other carriers to deploy commercial trials.
In the data centre domain, Huawei partnered with Migu, China Mobile’s entertainment content
subsidiary, to build the world’s largest OpenStack resource pool.

So far, Huawei has worked with multiple mainstream carriers around the world to implement
over 110 projects on the commercial use of cloudified networks. These projects cover a range
of scenarios such as carrier WAN, data center networks, enterprise campuses, and IoT.

To build 5G networks, transport networks should get prepared in advance. Huawei launched
the 5G-ready mobile transport solution X-Haul. This solution supports a 10-fold bandwidth
increase per base station and an access ring bandwidth increase of five to ten times. This helps
carriers easily address the deluge of data seen in enhanced Mobile Broadband (eMBB), an
application scenario in the 5G era. The solution can also be widely adopted in another 5G
scenario – ultra-reliable low latency communication (URLLC). In 2017, Huawei worked with
over 20 leading global carriers on the joint innovation and precommercial testing of 5G
transport networks.

Business Review 2016

In 2016, we maintained our strategic focus, continued making breakthroughs, and created real
value for our customers. Our annual revenue was CNY521, 574 million, up 32.0% year-on-
year.

Based on ongoing 4G network rollout, sustained growth in the smartphone sector, and our
growing capabilities in enterprise and industry solutions, Huawei earned CNY236, 512 million
in revenue from the Chinese market, up 41.0% year-on-year.

Based in part on a growing share of the smartphone market, we earned CNY156, 509 million
in revenue from Europe, the Middle East, and Africa (EMEA), up 22.5% year-on year

Due in large part to network infrastructure build-out in markets like India and Thailand, and
growing share in the Japanese tablet market, Huawei maintained its growth momentum in the
Asia Pacific Region and achieved CNY67,500 million in revenue, up 36.6% year-on-year.

In the Americas, carriers in Mexico increased their investment in communications networks,

enabling Huawei to earn CNY44, 082 million in revenue from this region, up 13.3% over 2015.

Carrier Business 2016

As digital transformation advances in all industries, technologies like cloud computing, IoT,
and video are being used more extensively in each domain. Global carriers are leveraging their
strengths to shift their business models from an investment-driven approach to one that is more
value-driven. They are exploring new services and improving service quality. The aim is to
deliver the ultimate ROADS (i.e., Real-time, On-demand, All-online, DIY, and Social)
experience to end users, achieve new success, and serve as the cornerstone of digital
transformation in all industries.

Huawei always puts customers first. We provide carriers with tailored solutions to help them
go digital, increase revenue, and achieve sustainable development. We strive to be the best
business partner for global carriers.

With an eye to the future, we work closely with our partners to help carriers build All Cloud
data-center-centric networks, and more agile digital operations systems. We help carriers
succeed by developing video into a basic service and offering cloud services to help vertical
industries go digital.

To make the most out of existing networks, Huawei employs innovative solutions and service
models to help carriers improve user experience, expand their user base, improve efficiency,
and reduce costs. This will help maximize network value and lay a solid foundation for digital
transformation.

In 2016, revenue from our carrier business was CNY290,561 million, up 23.6% year-on-year.
We continue to move forward with our pipe strategy. With a focus on digital transformation,
we have seized key opportunities arising from video, cloud, and operations transformation, and
have explored the potential of new solutions and business models. We have responded to
uncertainties with agility, and have worked to cultivate an ecosystem that will help drive the
industry forward. These efforts have contributed to our steady growth.

Efforts in the video domain include:

Helped leading carriers in China, Germany, Turkey, and other countries develop innovative
video services.

Worked with industry partners to build a more open, collaborative video ecosystem.
Led the development of the video mean opinion score (video MOS) standard at ITU-T, and
defined U-vMOS, a video experience measurement system focused on user experience that
complies with the video MOS standard.

Helped carriers succeed by rapidly constructing video networks that deliver an inspired
experience.

We worked with carriers to expand the B2B market by offering cloud services. Specifically,
we:

Helped Chinese carriers provide e-government cloud services.

Deployed B2B cloud services for carriers in Thailand, Chile, and other countries.

Teamed up with multiple leading global carriers to deploy smart home, smart metering, and
connected vehicle services to monetize future markets built on 100 billion connections.

We continued to flesh out our All Cloud network solutions, aimed at helping carriers go digital
for more success:

We partnered with a number of leading global carriers, guiding their transformation towards
All Cloud network architecture.

We formed strategic partnerships with carriers like China Unicom Shanghai, HKT, focusing
on operations transformation. Our Telco OS digital operation system has allowed them to
evolve their O&M systems and go digital. Together, we explored how to deliver the ultimate
ROADS experience to end users.

Wireless Networks 2016

As MBB applications and scenarios become more diverse, demand for greater data
transmission speed has increased dramatically, from Kbps to Gbps. Requirements for latency
have tightened from seconds to milliseconds. This has raised the bar for mobile network
capabilities and operations.

Huawei helps carriers maximize the value of their existing networks with a broad portfolio of
solutions.

In 2016, deployment of 4.5G networks became a trend in the industry. By the end of the year,
we had deployed over 60 4.5G networks. We helped carriers expand their business scope
beyond the traditional Business to Customer (B2C) services to also include Business to Home
(B2H) and Business to Vertical (B2V) services. They have been able to increase their number
of high-value connections and expand their business while delivering a better service
experience to users. With 4.5G technology, Huawei is working with customers to explore new
network architecture, business models, and operating models to prepare for 5G. Our 4.5G
Evolution concept will help carriers further maximize the value of legacy networks and support
them in the evolution towards 5G.

As the digital economy gains momentum, households are becoming the center of digital life.
Huawei's wireless home broadband solution known as wireless to the x (WTTx) has been
deployed by over 100 carriers in Asia-Pacific, Africa, Latin America, and Europe, among other
regions, providing broadband services for more than 30 million households. Featuring faster
and more cost-effective deployment, this solution is enabling a growing number of households
to make the jump from digital to smart.

As one of the early advocates of the Narrowband Internet of Things (NB-IoT) radio technology
standard, Huawei has continued to play a leading role in its development and deployment. We:

Established five open NB-IoT labs in 2016.

Partnered with GSMA to establish an NB-IoT industry alliance, which has attracted 50 key
members.

Took the lead in NB-IoT rollout. We worked with 18 carriers in China, Japan, South Korea,
Europe, the Middle East, and Africa at a strategic level, and launched over 20 commercial
trials.

An ecosystem is fast maturing around LTE integrated Trunked Radio Access (LiTRA), a
broadband trunking communications technology developed by Huawei based on LTE. A
variety of devices are now available for LiTRA, supporting applications in a range of
emergency communications scenarios. Huawei is an active player in the development of LTE
trunking standards, we have submitted more proposals and had more of them approved than
any other company. Huawei is also the initiator and rapporteur of the 3GPP Mission Critical
Push to Video Work Item.
With large-scale LTE network deployments underway, mobile video services have become a
major source of traffic in the MBB pipe. Huawei offers end-to-end mobile video solutions, and
is driving continuous innovation in standards for the mobile video experience and in business
applications. We are meeting carriers' complex requirements for monetization, improved
experience, and delivery of B2X video services across all scenarios.

Huawei is actively involved in building national broadband networks to drive global MBB
development and bridge the digital divide. Our innovative Lean GU900 and multi-sector
solutions have helped over 100 carriers in Southeast Asia, the Middle East, Africa, and South
America maximize network value. In particular, our multi-sector solution can help increase
single-site capacity by a factor of 3.5.

We led the establishment of a site alliance in the Southern Pacific. The alliance draws
governments, regulators, carriers, tower operators, and property owners into a synergistic
ecosystem, and enables the entire industry to cooperate and create new business opportunities.
This alliance now covers over 30,000 sites.

Fixed network 2016

Cloud services and video, especially 4K video, have given a strong impetus to the development
of ultra-broadband networks. The year 2016 saw a boom in the growth of carrier video
services.

Video is predicted to contribute approximately 75% of all traffic on carrier networks by 20201.
All major global carriers now see video as a huge business opportunity. Huawei's video
strategy incorporates consulting, cooperation, platforms, and networks. The strategy aims to
help carriers build networks adapted end-to-end for video as a basic service, deliver the best
video experience, and succeed in their video business. In 2016, Huawei teamed up with Etisalat
to launch the first 4K ultra-HD TV service in the Middle East and Africa.

In the video era, user experience has become an important metric guiding carrier network
construction. Huawei actively seeks joint innovation with industry-leading carriers, aiming to
provide users with the best possible experience:

Huawei has deployed 4K video networks for many major carriers to deliver 4K video services.

Huawei's Mobile Backhaul Solution ensures the best user experience in HD mobile video.

By the end of 2016, Huawei had deployed over 190 mobile backhaul networks in over 100
countries, serving one-third of the world's population. To develop the industry ecosystem, we
joined hands with industry partners to launch the Open Life smart home business development
program, which now has over 200 partners globally. We have signed memorandums of
understanding with 20 carriers around the world in an effort to build a robust smart home
ecosystem.

Cloud Core Networks

With All Cloud architecture, Huawei helps carriers migrate their networks to the cloud, and
leverage intelligent pipes to provide communications and connectivity services to individuals
and enterprises based on their unique needs. By enabling industries to go digital, we are helping
carriers to open up a huge new IoT market.

Huawei has signed more than 170 contracts relating to commercial cloud networks worldwide.
Our NFV solution won the Best NFV/ SDN Solution award during the 5G Asia Summit, the
Best Network Virtualization Product award at the 2016 LTE Latin America Conference, and
the Best Technology Enabler award at the Mobile World Congress. Personal communications.
Huawei Voice over LTE (VoLTE) and Voice over Wi-Fi (VoWiFi) solutions have been
deployed on 110 networks worldwide.

We built the world's largest high-quality VoLTE network with China Mobile.

We helped China Mobile Sichuan launch its cloud capability exposure platform.

The Huawei Home Presence solution was awarded Best Innovative Future Comms Service
over IMS at the 2016 IMS World Forum.

Enterprise communications: We have evolved from converged communications to cloud-based

communications, expanding from enterprise office systems into core production systems, and
are actively engaged in open innovation across industry borders:

We now serve more than 600,000 enterprises in the finance, electricity, healthcare, and public
safety industries across more than 150 countries.

We have established a Cloud Enterprise Communications Alliance to provide more diverse

solutions to our customers.

We were honoured with the Frost & Sullivan 2016 EMEA Video Conferencing Endpoints and
Infrastructure Growth Excellence Leadership Award.

Smart pipes:

Our CloudEPC solution is the leading solution for the cloud-based deployment of large-scale
commercial networks.

Our CloudMSE solution improves the video experience.

Our forward-looking Multi-access Edge Computing (MEC) solution won the Best Edge
Computing Technology award at the MEC Congress.

Our SmartPCC solution remains a leader in the unified policy and charging control market, and
won the Innovation in Policy and Charging Rules Function (PCRF) Virtualization award at the
2016 Policy Control Conference.

As a key element of Huawei's IoT strategy, Huawei launched Ocean Connect, an IoT ecosystem
with an IoT connection management platform at its core. Ocean Connect solutions offer open
interfaces to devices and applications and interconnect with third-party platforms via the cloud.
By bringing together industry partners, Ocean Connect creates value for customers, and makes
higher-quality smart lifestyles possible.
 Software
Huawei continues to create new digital enabling systems, with five key native features:
ROADS native, Ecosystem-native, Agile-native, Cloud native, and Analytics-native. The
systems behind these features help carriers go digital faster.

Our Hybrid Video Solution helps carriers succeed in their video business by developing video
into a basic service and a core competency. We have continued to drive the growth of a robust
video ecosystem. We released the Best-UHD Industry Development white paper, and together
with our ecosystem partners, we are pushing the video industry forward. In 2016:

Huawei's Hybrid Video Solution helped China Telecom Sichuan expand its IPTV subscriber
base to over 10 million and add an additional 3.5 million 4K subscribers. We also helped the
company improve user video experience by way of intelligent video operations.

We helped Deutsche Telekom commercialize the first local video service that integrates fixed
and mobile services. By delivering the best content and experience, Deutsche Telekom was
able to set itself apart from the competition, and rapidly increase its ARPU and user base.

Business Enabling System (BES): The product capabilities of our BES, based on micro services
and a digitized architecture that supports hierarchical decoupling, continue to improve:

The BES was named an industry leader by Gartner and Ovum.

We successfully launched the SaaS BES Cloud solution.

We made significant contributions to the evolution of TM Forum Frameworx 16.0 in terms of

processes, models, and best practices.

Universe Analytics: Our big data analytics platform Universe Analytics is a core engine for
digital transformation. By providing agile, real-time, and intelligent business analytics
capabilities based on the needs of carriers, the platform helps carriers improve end-to-end
efficiency in delivering mainstream applications such as intelligent video operations and
precision video marketing. By opening up analytics capabilities and bringing together industry
partners, Universe Analytics enables carriers to monetize their data assets. It won the Best
Telco Big Data Analytics Platform award at the Telco Data Analytics Summit 2016.

Digital business cloud: We have developed a leading cloud service platform for digital services,
which provides carriers with cloud services like digital content aggregation, video, and
enterprise B2B. The platform has attracted over 4,000 partners, and already has over 600,000
units of digital content and applications.

IT
Based on our All Cloud strategy, we leverage our unique strengths in cloud-network synergy
to help carriers build a single cloud that meets both their internal and external needs. We are
helping carriers go digital in three areas: providing services for industries, improving internal
IT efficiency, and reshaping telecom networks.

In 2016, our IT solutions achieved the following:

Huawei helped Deutsche Telekom, Telefonica, and China Telecom provide convenient and
secure public cloud services by engaging in joint innovation with them and supporting their
operations. Their big data, IoT, and other new services are moving to the cloud faster than ever.

Our B2B Hosting Cloud solution has helped Chinese carriers build over 50 e-government cloud
platforms. It also helped carriers outside China, including True in Thailand, REDtone in
Malaysia, and Entel in Chile, to tap into the new huge cloud services market for governments
and enterprises.

Our FusionCloud Unified Cloud Infrastructure Solution was adopted by over 50 carriers,
including Vodafone, Orange, and MTN, to support the migration of their business, operations,
and management to the cloud, and to deliver agile operations and efficient O&M for their
internal IT systems.

With its open architecture, Huawei's NFVi solution effectively helped carriers like Telefonica,
America Movil, and SingTel to migrate their telecom networks to the cloud, and build a fully
open architecture and ecosystem.
Our Value Propositions
The convergence of ICT technologies continues to accelerate. New technologies, particularly
cloud computing and Big Data, are becoming key enablers for ICT innovation and
development. These new innovations are not only reshaping the CT industry, but also creating
enormous business opportunities through the convergence of IT and CT. In response to these
revolutionary changes, Huawei continues innovating based on customer needs and leading
technology. Through open partnerships, Huawei focuses on providing future-oriented
information pipes to build a Better Connected World and continuously create value for
customers and society. Huawei aims to become a strategic partner that assists carriers in their
future transformations, a leader in providing enterprise ICT infrastructure, and a top smart
device brand preferred and trusted by consumers.
Ubiquitous Broadband
The Internet makes it easier to disseminate and obtain information, which in turn stimulates
consumers' desire to go online anytime, anywhere, on any device. This level of connectivity
enables users to access more high-quality content and applications and enjoy the convenience
of mobile offices. Enterprises are now migrating their IT systems to data centers and clouds,
which places higher requirements on networks. Harnessing future data surges will require
networks with greater capacity, coverage, and agility. Huawei aims to bring the benefits of
networks to more and more people. Consumers' desire for network connectivity, bandwidth,
reliability, and security is far from satisfied. In response, Huawei provides carriers at different
development stages with viable solutions to best suit their needs, thus helping them address
business and technological challenges. Huawei is committed to helping carriers increase
network capacity, optimize network management, and enable Internalized operations. As part
of this goal, Huawei has continuously innovated new architectures (such as SoftCOM) and new
technologies to deliver cutting-edge products and solutions that enable seamless evolution, and
help our customers build highly efficient infrastructure networks. Huawei also supports
carriers' efforts to reconstruct their telecom networks with IT technologies, which is a key step
to realizing Internetized operations and offering subscribers on-demand services and high-
quality content. Specifically, Huawei helps carriers integrate their existing IT systems and
transform their networks with NFV and SDN technologies; aggregate highquality content to
expand their revenue streams; and digitize operations to deliver a ROADS experience and make
ubiquitous broadband readily accessible for all.

Agile Innovation

The ICT industry will continue to advance rapidly well into the future. New trends such as
mobility, cloud computing, Big Data, and social networking are driving the industry to new
frontiers. Significant digital changes are taking place in the physical world, with the Internet
driving the modernization of traditional industries.

Enterprises in all industries need to rapidly identify business opportunities and continuously
enhance IT-enabled organizational collaboration in order to launch new products and services
faster and more effectively. IT is evolving from a support system to a production system,
becoming one of enterprises' core competences.
Huawei is committed to providing innovative onestop ICT infrastructure. As part of this drive,
we deliver cloud data center infrastructure and digital infrastructure solutions to help customers
maximize resource utilization (e.g., storage, computing, and network resources). Through this,
business systems can be quickly deployed, easily operated and maintained, and efficiently
managed. Huawei also provides industry solutions that satisfy the needs of vertical industries.
Our intelligent data analysis system leverages Big Data technologies to help customers identify
business opportunities and achieve agile business innovations. Through cooperation and
innovation, we integrate our ICT products into partners' industry solutions to better meet the
requirements of various industries.

The next 30 years will witness the gradual replacement of traditional data centers with hybrid
cloud data centers. In response to this trend, Huawei has begun delivering hybrid cloud
solutions by incorporating technologies for public cloud services. As a result, our solutions are
a perfect fit for enterprise customers with diverse needs, and can help carriers deploy public
clouds to seize the tremendous opportunities offered by cloud services.

Inspired Experience

In the future, smart devices will become an integral part of people's lives, as they will be better
at identifying user needs and developing situational and emotional awareness.

Through innovative industrial designs and key technologies, Huawei delivers premium
products that are stylish, secure, and easy-to-use. By developing robust application and service
ecosystems, Huawei offers a wide range of services, mobile phones, smart watches, and other
smart devices for various scenarios (e.g., health, lifestyle, work, home, and outdoor settings).
Our commitment to device-cloud synergy contributes to a superior user experience in all
scenarios and creates a long-term emotional bond between Huawei and users. We also strive
to provide users worldwide with a convenient online to offline (O2O) purchase experience and
services, taking user experience to the next level.

Business Review 2015

In 2015, Huawei achieved significant results from its focus on the pipe strategy. The company
achieved sustainable growth in the carrier, enterprise, and consumer businesses. Its annual
revenue totaled CNY395,009 million, a 37.1% increase over the previous year.
Thanks to carriers' massive 4G network rollouts, explosive growth in the smartphone sector,
and the increased expertise of the Enterprise BG on industry solutions, Huawei earned
CNY167,690 million in revenue in the Chinese market, up 54.3% year-on-year.

■ Rapid growth in wireless and fixed networks and increased share in the smartphone market
yielded CNY128,016 million for Huawei in Europe, the Middle East, and Africa (EMEA),
marking a 27.2% increase in revenue over 2014.

■ Due in large part to infrastructure build-out in markets such as India, the Philippines, and
Thailand, Huawei maintained its momentum in the Asia Pacific Region to achieve CNY50,527
million in revenue, up 19.1% year-on-year.

■ In the Americas, carriers in Mexico, Argentina, Peru, and other countries increased their
investment in communications networks. Huawei's smartphone business also grew rapidly in
the US market. These factors enabled Huawei to earn CNY38,976 million in revenue from this
region, up 26.4% over 2014.

Over the next three to five years, Huawei's revenue is estimated to grow at a CAGR of over
10%.
Carrier Business
The rapid development of the ICT industry is driving ubiquitous connections that change how
we perceive the world, reshape how businesses operate, and transform how cities and countries
are administered. ICT has become a national imperative backed by government policies, and
is continuously fueling innovation and development around the world. At the same time, users
are demanding the ultimate experience of ROADS (i.e., Real-time, On-demand, All-online,
DIY, and Social), thus providing an outstanding experience has become the core foundation of
carriers' business competitiveness in a fully connected era, propelling their digital
transformation.

Carriers connect the physical and digital worlds. As the Internet is sweeping the globe, carriers
are challenged to transform themselves and the industry ecosystem in which they operate.
Digital transformation is opening up new business opportunities for carriers to thrive and
succeed in a Better Connected World. We believe carriers will soon lead the value chain and
enable more than 100 billion connections through successful digital transformation, capability
exposure, and collaborative innovation in the industry. By seizing ICT opportunities
underpinning economic development, carriers will accelerate the transition toward tomorrow's
digital economy and become an important driver of economic growth.

Huawei is at the forefront of enabling carriers' digital transformation through its five Big
Initiatives: Big Video – Everywhere, Big IT – Enabling, Big Operation – Agile, Big
Architecture – Elastic, and Big Pipe – Ubiquitous. We provide end-to-end SoftCOM solutions
for these five Big Initiatives. In addition, by focusing on openness, collaboration, and shared
success, Huawei is committed to working closely with carriers and industry partners to
collectively drive digital transformation and create a Better Connected World through a robust
industry ecosystem.

In 2015, aligned with our pipe strategy and with a strong focus on ICT infrastructure and ICT
capability exposure, we continued to provide worldwide carriers with leading end-to-end ICT
solutions to accelerate their digital transformation. Our technological leadership and
competitiveness have been widely recognized by the industry and enabled us to achieve solid
business performance. In 2015, our revenue from the carrier business to tiled CNY232,307
million, an increase of 21.4% year-on-year. We made significant progress in each of our key
business domains in terms of market and ecosystem development.
In the wireless network domain, our MBB 2020 strategy focused on experience and networks
to evolve carriers' business models and establish a robust industry ecosystem. Specifically:

■ We delivered market breakthroughs across five continents, which has driven the adoption of
our LTE solutions in more than 140 capital cities. We have commercially deployed over 400
LTE networks and over 180 EPC networks, serving approximately half of all 4G users around
the world.

■ 4.5G technology advocated by Huawei received a formal name from 3GPP, which approved
LTEAdvanced Pro as the new marker for LTE standards.

■ We collaborated with carriers, device manufacturers, chip makers, and research institutes to
establish industry alliances and promote the sound and sustainable development of the mobile
industry with 700 MHz, 450 MHz, and 3.5 GHz.

■ Our wireless network solutions won international awards in 2015 and were widely
recognized across the industry. Together with HKT, we won the coveted Best VoLTE
Innovation award from consultancy firm Informa at the LTE World Summit 2015. In addition,
our LampSite Solution won the Best Mobile Infrastructure award at the Mobile World
Congress 2015.

In the fixed network domain, the global ultra-broadband industry developed rapidly in 2015,
and there was significant upgrading of fixed broadband networks from 100 Mbit/s to 1,000
Mbit/s. More than 100 carriers that focus on mobile services announced their plans to increase
investment in fixed broadband services. We launched our Gigaband development strategy, and
encouraged industry players to work together to achieve the goal of building ultra-broadband
networks that cover 90% of the world's population and enable a 1 Gbit/s speed for all users by
2020. We continued to increase our investment in experience-focused solution development
and reinforced our market leadership position in the fixed network domain. Specifically:

■ In the carrier IP field, we partnered with Telefónica to complete the industry's first SDN-
based IP/optical field trial. We helped Telecom Italia construct a pan-Europe backbone network
based on our terabit routing platform. We also partnered with China Telecom to construct the
world's largest SDN-based commercial backbone network.

■ In the optical transport field, we partnered with a European carrier to build the world's first
1T OTN, and collaborated with BT to complete testing for 3 Tbit/s optical transmission on live
networks, the fastest speed in the industry.
■ In the access field, we worked with TDC in Denmark to complete the world's first DOCSIS
3.1 early field test, and helped BT launch the world's largest customer trial of G.fast. We also
partnered with Beltelecom to construct Europe's first commercial 10G-GPON FTTH network,
and provide users with one-stop smart home solutions.

CONCLUSION
Guided by the 4Ps theory, this paper has put forward some suggestions about Huawei’s
marketing strategy for smartphones in china World, based on a survey about the market and
customer’s needs and demands. It is hoped to provide some useful reference for its marketing
in Arab World. Huawei's high-quality products that offer a superior experience have been well
received among consumers, and that the company has established and reinforced its brand
image in the mid-range and high-end markets. "Huawei's mid-range and high-end
smartphones, Mate7 and P8 in particular, as well as Honor-branded phones, have made solid
progress, helping us guarantee quality and sustainable growth in the consumer business.

This paper contributes to the theoretical orientation of marketing strategy and discuss about
marketing mix (4ps) and also how the marketing mix strategy satisfied the customer. As a
global company, Huawei has sought win-win development with local communities. As a
responsible corporate citizen, Huawei has proactively integrated into local communities to
support charities, education, environmental protection, healthcare, and disaster relief efforts.

We strive to create value for local communities and help them achieve prosperity and
sustainability. They have provided attractive and timely rewards to dedicated employees. As
Huawei continues to grow, they have paid more attention to their employees' career
development, providing varied career paths to help their diverse range of employees realize
their individual value.

The findings of this study indicate that the most important factor in age, career, monthly
income, price, prefer type of phone this factor are significant. This factor is affected to the
customer. These results support the ideas that despite the usefulness of the Marketing mix (4Ps)
scale as a concept; it should be adapted for the customer environment as well. The marketing
mix concept helps to understand the customer demand and also can understand how to capture
the customer.
In conclusion, knowing how marketing mix effect the customer satisfaction being able to
measure customer satisfaction. Measuring customer satisfaction can help Huawei phone
service provide reliable data that can be used to monitor and maintain and adding more feature
in phone to give better service to the customer.