An internal email written by Huawei founder Ren Zheng-fei and obtained by Sina Tech (link via Google Translate) sheds light on the secretive Chinese firm’s future. In it, Ren downplays his company’s reputation for opacity, which has fueled charges that Huawei, the world’s second largest maker of telecom equipment, is involved in espionage for the Chinese government.
Ren, who is 68 and rumored to be near retirement, also insisted Huawei will not go public in the next decade and that he will not hand over Huawei’s reins to a family member.
With sales of $35.4 billion last year, Huawei is the second-largest telecom network equipment seller in the world after Sweden’s Ericsson. It is also the world’s third-largest maker of smartphones, trailing after Samsung and Apple with a five percent share of the global market, according to IDC.
Concerns that Huawei is involved with espionage, however, have kept it from advancing in the U.S. market. Last October, a U.S. congressional report fingered Huawei and Chinese rival ZTE as a threat to national security, calling on U.S. government and private sector companies to avoid buying equipment from both. At the end of March, Sprint Nextel and Japanese telecom SoftBank promised the House intelligence committee not to use equipment from Huawei if they merge. Last week, Huawei’s executive vice president Eric Xu reportedly said that Huawei is pulling out of the U.S. market, but the company later said that Xu’s remarks had been misinterpreted.
Part of the U.S. government’s concern revolves around Ren’s past as a former engineer with the People’s Liberation Army. Huawei has repeatedly denied, however, that it is a security threat. In his email, Ren insisted that his reputation for secrecy is overstated.
“With regards to the media, I have always been completely transparent,” Ren wrote. He pointed to the number of articles he has authored himself over the last 20 years, as well as speeches he has given at various venues, including the St. Petersburg International Economic Forum.
Huawei’s founder was equally blunt in insisting that his successor will not be a family member. The New York Times recently reported that Huawei is “undergoing an unusual, American-style effort to decentralize Huawei’s management, including a high-profile, public search for his successor.”
Ren wrote in his email that he is looking for someone who not only has “vision, character, and determination,” but also takes a long-term strategy toward the company’s development and who is able to navigate the current business environment.
“None of my family members have these skills, so none of them will ever succeed me,” wrote Ren.
Ren’s daughter Cathy Meng, Huawei’s chief financial officer, has previously been named as a potential heir to her father’s position, but that seems less likely given what he wrote in his email.
More likely candidates include Ken Hu, one of the Huawei’s three rotating CEOs, who previously served as chairman of Huawei’s U.S. board operations. The other co-CEOs are also in the running: Xu, who has run Huawei’s strategy, marketing, products and solutions businesses and Guo Ping, who ran Huawei’s devices business.
Reports have repeatedly circulated that Huawei will launch an IPO, but Ren insists that his company will not be publicly listed within the next five to 10 years, echoing recent statements made by executive vice president Eric Xu.
Ren said that Huawei’s board of directors has never focused on going public because they don’t believe it’s in the best interests of the company’s development.
Photo credit: Huawei