Huawei earns 15% of its global revenue from the fast-growing business in Africa. Reuters
Huawei earns 15% of its global revenue from the fast-growing business in Africa. Reuters

Huawei’s quest for hearts and minds in Africa

Chinese telecoms giant mixes multimillion dollar investments in training equipment and facilities with a public relations onslaught

October 16, 2016 11:52 AM (UTC+8)

It is easy to view Huawei with suspicion when you live in a country that has banned the Chinese telecommunications giant from doing business in certain local markets and forbids government employees from owning Huawei-branded phones.

Such is the case in the US, where fears of spying have brought about restrictions on the company’s operations, and where the small consumer base that buys its phones and devices has done little to inspire confidence in the brand.

In Africa — Huawei’s fast-growing market, where the company earns 15% of its global revenue — public perceptions are decidedly different.

Huawei’s biggest PR challenge in the world’s second most populous continent to date has been dealing with accusations that it doesn’t do enough to train locals in the approximately 40 countries on the where it has a physical presence.

The company has responded with an onslaught of announcements about newly-established training programs and partnerships across Africa, some of which have involved multimillion dollar investments in training equipment and facilities, and others which entail little more than the typically hollow ring of pure PR.

The most recent announcement came from Tanzania on September 30 at a ceremony co-hosted by the Chinese Embassy and Huawei in Dar es Salaam, at which the company promised to award 10 scholarships to Tanzanian students in 2017, in support of the country’s Information and Communications Technology (ICT) development.

Tanzanian Prime Minister Kassim Majaliwa commended Huawei for its cultivation of local ICT talent and said that the government would work closely with the private sector to further ICT development.

Huawei is not shy when it comes to its spending on Corporate Social Responsibility (CSR) and there is still much to gain in Tanzania, where it opened its sixth store — or Experience Shop — in May this year. The firm aims to dominate the country’s smartphone market by the end of 2016.

Top college students

Tanzania has also been earmarked for Huawei’s “Seeds for the Future” program, which Huawei Southern Africa’s PR Manager described as the firm’s global CSR flagship program.

“Through this program, Huawei selects top college students and young government officials working in ICT-related departments for a study trip in China,” Huawei’s spokesperson explained. “Over the course of the program, Huawei shares its ICT expertise and experience in managing a multinational with young ICT professionals, and helps fuel the development of local ICT industries.”

Ten Tanzanian students have taken part in the program this year, two of which have since been employed by Huawei.

In discussing Huawei’s Africa-based CSR and technology transfer initiatives on the “China in Africa Podcast,” co-founder and co-host Eric Olander pointed out the importance of differentiating between successful public relations drives and the transfer of tangible skills which will lead to the further localizing of Huawei’s business operations across Africa.

“Employees are our most valuable assets,” said the spokesperson. “As a highly localized company in Africa, over 60% [of its 5,800 employees on the Africa team] are locally recruited.”

Ben Tsui, author of a policy brief on Huawei’s skills transfer, and an MA student at the Johns Hopkins University School of Advanced International Studies, points out that there are several incentives for Huawei to invest in local training programs, rather than depend on
Chinese employees.

From Huawei’s perspective, local hiring reduces costs in salaries and benefits. Governments such as Ethiopia, Ghana, Kenya and Nigeria put pressure on foreign companies to hire locally, which often requires a series of training programs.

Regardless of such pressure, a lack of skilled workers would only hinder the growth of Africa’s ICT industry, and development of telecommunications infrastructure on the continent.

Then there are the PR benefits, including increased acceptance in local markets, which may well outweigh the human capital return.

Tsui’s paper points out that local investments improve Huawei’s image in the eyes of local consumers and businesses, as well as potential partners.

Technology transfer

This may well be the crux of it. Huawei admits that its training programs, which have involved 30,000 employees, customers, suppliers and partners in Africa, normally run from just two weeks to one month.

Whether or not a two-week course is substantive enough to
justify the firm’s claims to technology transfer fame is debatable. But does it matter?

Olander observed a “deep emotional connection to the brand” in the Democratic Republic of Congo’s Kinshasa, because it was Huawei that was building the city’s cellular towers and network operation hubs.

The same is true in Zambia’s capital Lusaka, where Huawei is acknowledged to have been responsible for the infrastructure that led to the city’s 3G networks, which the majority of Zambians would say have improved their lives.

On a continent where Apple (with its emphasis on relatively high-end products) may never gain significant market share, Huawei is establishing itself as a company with an interest in serving the African market.

The true value of the training programs and scholarships that
have recently become the basis of Huawei’s public relations strategy is, to a large extent, irrelevant.

These initiatives serve to reinforce China’s identity as a source of investment and opportunity, and being an unwilling or ungrateful recipient is unlikely to happen in Africa.

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