Conflicts with the United States made 2019 a year of uncertainty for Huawei, the second-largest cell phone manufacturer in the world. Threats of trade sanctions against the company staggered sales of the Chinese company, while expectations of rapid deployment of a 5G network in the next decade were reduced.
In Mexico, the CEO and founder of Huawei Ren Zhengfei ruled out that the trade war between China and the United States affects the company’s expansion plans in Latin America, where the company lives a momentum. The consequences of the commercial conflict have not been severe for Huawei. The company will not exceed Samsung sales – at least not this year – globally but has maintained its commercial expansion strategy, where Latin America has had a special place in the plans.
In Latin America, Huawei has managed to position itself as a technology company in different sectors. Within mobile devices, the company went from being a stranger to being among the top 3 in the region. The company has also closed major telecommunications contracts for the development of a 5G network. Also, they’ve opened data centers to offer cloud-based solutions for Latin American companies.
The emergence of Huawei in the Latin American mobile market
Huawei entered the smartphone market in Latin America with great success. In just five years, the Chinese company went from being a stranger with only a 2.3% presence of the cell phone market in 2013 to cover 9.4% of the market in 2018, a golden year for the company in which it got its higher growth in the region.
Currently, Huawei operates in 20 countries in Latin America. In 14 of these countries, its presence in the market exceeds two digits, while in four of them, it has a presence above 20%. Also, Huawei is in the top 3 cell phone brands in Mexico, Colombia, Peru, and Central America. In Colombia, the company has a presence in 25% of the market.
To achieve these results, Huawei has made significant marketing investments in the region. In addition to advertising in public spaces such as airports, subways, or roads, the company has sponsored sports teams from Latin America, such as the Panama National Team, Alianza Lima, or Club América.
Success has not accompanied the IT company everywhere. Huawei failed in its attempt to enter the Brazilian market in 2014 and has not managed to position itself in Argentina.
Huawei wins contracts for the 5G network in Latin America.
The mobile device market has been juicy for Huawei, but the company’s core business is in telecommunications.
The experience accumulated in recent years in China, both in 5G and artificial intelligence, has allowed Huawei to reproduce its success in other countries. This sector is the one that has raised the most concerns for the United States as a national security risk. According to the Trump administration, Huawei’s infrastructure could be used by the Chinese government for espionage.
Other governments do not have the same concerns. This month, the company announced that it was closing the year with 60 contracts related to 5G. Seven of them are in Latin America.
In a meeting with the Latin American press, Ren Zhengfei highlighted the commercial potential of this technology for the region, with particular emphasis on Chile, a vast country with a tiny population and abundant resources. For the executive, these characteristics make the country require Artificial Intelligence in sectors such as agriculture – applying AI to the procedures. For example, choosing the most appropriate time for harvest – and for mining, performing operations without the intervention of man.
“The 5G network offers very low latency, less than milliseconds, so it allows us a total synchronization between a team and the place. We see both farms and autonomous mines in the future,” summarized the CEO of Huawei.
Huawei Cloud in Mexico, Brazil, and Chile
According to Cisco data, cloud data traffic will account for 95% of data center traffic in the world. Huawei is investing resources in having a privileged position in Latin America in this expanding sector.
In August 2019, the company announced the opening of Huawei Cloud in Chile. In December 2019, the company also opened a center in Brazil. Expansion plans include Mexico.
Huawei has been more successful with cloud computing services than with the sale of cell phones in Brasi. Huawei Brazil CEO Yao Wei mentioned that the company has been in the country for 21 years and has gradually earned a reputation as a reliable partner among industry organizations, universities, and government organizations.
The executive said that “Huawei not only offers advanced communication services for the Brazilian people, it also introduces advanced technologies throughout Brazil. Over the past decade, Huawei has trained more than 30,000 talented people in the ICT field. HUAWEI CLOUD is committed to becoming a “fertile soil” that facilitates digital transformation for governments and businesses. Huawei will continue to increase investment in the public cloud and will collaborate with Brazilian partners and customers through HUAWEI CLOUD’s partner development programs to build a collaborative and open cloud ecosystem. “
In the presentation of the new data center, the president of Huawei Cloud Latin America Xiao Fe compared the company’s service “like the Ponte Estaiada (Octavio Frias de Oliveira bridge) of São Paulo, offering quality services to connect the present and the future of companies.”
With the presence of Huawei Cloud in the region of Chile, the region of Mexico, and now the region of Brazil, the company has formed a triangular area in Latin America to offer better coverage and connectivity.
Four technologies to transform Latin America
The expansion of Huawei in Latin America is a sign of the digital transformation that the region is currently experiencing. The region needs to modernize and, therefore, needs partners that offer them the necessary technology to face the challenges that Latin American countries face.
For this year, the estimates of the growth of the Gross Domestic Product of Latin America were discouraging. Except for Colombia, the region experienced an economic slowdown, and the results are below its potential.
Latin America needs to rethink its development strategy and take advantage of the latest technological advances to bridge the gap that separates it from the world’s most advanced economies. In this scenario, four technologies will be essential for this to happen:
- Cloud computing
- Artificial intelligence
- 5G network
- Internet of Things
As a company, Huawei is a reasonably advanced point in the development of these industries, which makes the Chinese company a strategic partner in the region’s progress.
Huawei is not the only company that offers these services, but it is one of the few that can integrate these four technologies. Huawei Cloud executives in Latin America recalled that the company has an accumulation of more than ten years of experience in these technologies.
“The convergence between the cloud, the AI, the 5G network, and the IoT will trigger a massive burst of innovation that will accelerate the intelligent improvement of our entire society.”
Xiao Fe, President of Huawei Cloud Latin America
In the coming years, the cloud will become a significant force that will drive all industries towards digitalization and the implementation of smart technologies on an unprecedented scale. For this to become a reality, data centers need to provide full-stack capabilities of industry-leading AIs for all scenarios.
These technological solutions will have an impact on both the government and the retail, finance, transportation, logistics, and Internet industries. The continuity of technological innovation is the key to driving social progress. Over the next ten years, the cloud, AI, the 5G network, and IoT will become crucial technologies: they will be the main drivers of social intelligence.
Each Latin American country has different challenges to achieve these results. In Mexico, the priority of the current government is to extend the Internet infrastructure to the most remote areas of the country. In Argentina, the government has promoted a policy of repatriation of talent, which has made the country an essential center for technological development. Brazil has attached increasing importance to digital transformation. With the use of a series of advanced technologies, such as cloud computing, artificial intelligence (AI), and 5G, Latin America can improve its industrial capacity, the livelihoods of its people, and the level of digitalization throughout the region.