Chinese giant Huawei to build cloud computing data centre in NZ
Chinese technology juggernaut Huawei plans to splash out hundreds of millions of dollars in New Zealand after praising the country's approach to global business.
Founder and chief executive Ren Zhengfei met with Prime Minister Bill English in Wellington on Tuesday to discuss its plans, which the company said would see it spend $400 million in New Zealand over the next five years.
Worldwide, Huawei employs more than 170,000 staff – almost as many as Apple and Google combined.
Spokesman Andrew Bowater said its spending plans were in part "aspirational". $250m of the spending would be accounted for by its intention to source more products and services locally.
But he said the company also intended to build a cloud-computing data centre – possibly in connection with a local partner – in New Zealand in about two years, and would expand its research centre in Wellington while opening another in Christchurch.
Huawei employs about 150 staff in New Zealand.
Ren said in a statement that "New Zealand's open and fair trade environment" and its emphasis on developing new technology had facilitated Huawei's ongoing commitment.
Economic Development Minister Simon Bridges said the investment would "touch many areas of the economy and open up global opportunities for New Zealand".
The expanded Wellington research lab, based at Victoria University, will investigate technologies such as 5G cellphone networks, "big data" and the potential of internet-connected devices, or the so-called "internet of things".
Huawei said it would offer 100 undergraduates the opportunity to travel to China for technology and cultural exchanges over the next five years, and would also open a regional office in Wellington.
Huawei has become a poster boy for China's modernising economy, despite efforts by the United States and Australia to constrain the company's growth in their markets, citing national security concerns.
Those concerns came to a head in 2012 when the US House of Representatives' Intelligence Committee urged American firms to stop doing business with Huawei and fellow Chinese firm ZTE, saying China could use their equipment to spy and for cyber attacks.
The same year, the Australian government barred Huawei from involvement in its A$37 billion National Broadband Network initiative.
The obstacles have not been mirrored in New Zealand, where Huawei has been a supplier to Spark, Vodafone and 2degrees. It has also supplied Enable and Ultrafast Fibre, the companies that are building the ultrafast broadband network in Christchurch and the lower North Island.
Huawei supplied and partly-financed 2degrees' mobile network.
In 2015, it also provided the technology for Vodafone's $22 million cable broadband upgrades in Wellington and Christchurch.
Last year, Spark began trials in Christchurch of 4.5G cellsite technology using equipment supplied by Huawei. Chorus buys a small amount of Huawei equipment for its rural networks.
Nor have the overseas blocks stopped Huawei's stellar growth.
Huawei is expected to report its 2016 revenues jumped by almost a third to just under US$75 billion when it reports its annual results at the end of the month.
The company has set its sights on overtaking Apple to become the world's second-largest smartphone company – behind Samsung – in 2018.
But it has not all been plain sailing in recent months.
Huawei's smartphone unit is understood to have missed its internal profit target for 2016 despite achieving higher-than-expected sales.
That prompted Ren to send a memo to staff last month saying the company wouldn't pay for those who didn't work hard and who wanted to "just count money in bed".
Huawei is moving into cloud computing, challenging players such as Amazon and Microsoft.
Bowater said the initial focus of its New Zealand data centre would be to serve the local market, but it could also "be a bit of a regional hub".
"There is an opportunity for 'NZ Inc' to position itself as a safe haven for data."
The obvious location for the data centre was Auckland but it "could be anywhere", he said.