China’s Huawei outshines rivals in mobile network, cloud sales in LatAm

Despite the efforts of the United States to restrict the use of the company's technology, China’s Huawei continues to expand its network equipment and cloud business sales in Latin America.

This has occurred, in terms of mobile network equipment, amid declining sales of its rivals that are closer to the US – namely Nokia and Ericsson.

Last year, the Chinese company sold the equivalent of US$4.89bn in the Americas, according to the company's just released 2023 annual report, growth of 10.9% on 2022 in yuan.

As Huawei faces bans on operating in the US and Canada, the figures largely correspond to Latin America. In 2022, Huawei's sales in the region were 31.8bn yuan (currently US$4.40bn).

In contrast, Nokia reported around 1bn euros (US$1.1bn) in revenue from Latin America last year, down 12% on 2022 in constant currency and 14% as reported.

Globally, Nokia’s 2023 net sales declined 8% in constant currency (down 11% as reported), to 22.2bn euros.

Ericsson posted a 3% decline in 2023 net sales for its market area comprising Europe and Latin America, to 64.9bn Swedish kronor (US$6.1bn). In currency-adjusted terms, sales were down 9%.

"Sales in both Europe and Latin America declined following high investment levels in 2022. Sales decline in Europe was partly offset by market share gains. Reported sales decreased by -8%," the company said in its Q4 financial report.

Ericsson’s 2023 global sales fell 3% to 263bn kronor.

Worldwide, Huawei reported revenues of 704bn yuan, up 9.6%. 

The only geographies in which there was growth were China and the Americas. In Europe, Middle East & Africa (EMEA) and Asia Pacific (Apac), the Chinese company reported lower sales.

CLOUD

By segments, Huawei's chief business continues to be ICT infrastructure and consumer (phones and other devices), which together represented more than 600bn yuan in revenue last year.

But the fastest-growing segments were intelligent automotive solutions and cloud, which in 2023 were up by 128% and 21.9% respectively.

Cloud is an area in which the company has made strong investments in Latin America in recent years. In cloud, Nokia has also seen an increase in sales in Latin America.

As BNamericas has reported, Huawei has distributed Huawei Cloud data structures, of different sizes and types, in countries in South America, Central America and the Caribbean.

“In Latin America, Huawei Cloud is the cloud service provider with the most nodes in the region. Huawei Cloud promotes the digital transformation of thousands of local customers in industries such as finance, media, retail, logistics, and internet. Chile's SMU group, for example, has fully migrated its core systems to Huawei Cloud,” the company wrote in its report, citing one of the few cases that it makes public.

SMU is Chile’s third largest retail chain. Under different brands, it operates in all 16 regions of the country. Additionally, it has a growing presence in Peru, through the Mayorsa and Maxiahorro brands.

Globally, by the end of 2023, Huawei Cloud covered 30 geographical regions and 84 availability zones (AZs) and provided services for customers in more than 170 countries and regions, according to the company.

UNDER PRESSURE

Huawei's expansion in Latin America comes at a time of heightened geopolitical tension between China and the United States. 

Washington has put pressure on companies that have US shareholders, that are listed on US stock exchanges or that provide services to US companies, even if operating in other countries, not to use Chinese technology.

Yet, in addition to large Latin American carriers, most of whom are Huawei's clients for 3G, 4G and 5G, the Chinese firm has a strong appeal among internet service providers, for reasons mainly of price and close customer support.

The second-largest Brazilian ISP, Brisanet, relies on Huawei. In Colombia, Velonet also uses the company's equipment.

But pressures are intense.

The CEO of a major B2B connectivity company in Brazil told BNamericas, on condition of anonymity, that some of its multinational OTT clients (Google, Meta, among others) have questioned the firm over the use of solutions from Chinese companies in its backbone network.

Citing legal restrictions in the US, these customers have conditioned agreements on a replacement of Chinese suppliers. Among these is Huawei.