Chinese top telecoms equipment maker Huawei Technologies expects its annual sales in Europe to triple this year thanks to its aggressive expansion effort in the continent.

The Shenzhen-based company forecast its annual sales in the European market to hit US$600 million, said company's European spokesman Richard Li yesterday.

That compares to US$200 million in contract sales in Europe last year.

"Europe is the most important strategic market for Huawei," Li said.

"The European market promises huge potential as there is a big number of big global telecoms operators in Europe."

Huawei, the Chinese technology icon, last year recorded 46.2 billion yuan (US$5.57 billion) in sales, up 45 per cent, year-on-year.

Its annual overseas revenues hit US$2.28 billion last year and the firm expects it to reach US$4 billion in 2005, accounting for nearly half of its total annual sales.

Huawei's overseas sales come mainly from developing countries but the firm has started making a significant mark in developed markets such as Europe.

Huawei now employs about 1,300 people in the continent, 75 per cent of whom are locals, Li said.

The firm has established a regional headquarters in Britain and 26 offices in Europe.

Li said Huawei's products are now widely used in 26 countries in Europe.

In December, Huawei won a contract from Dutch carrier Telfort to build a 3G mobile communications network in the Netherlands.

That has given Huawei a beachhead to compete in the European 3G market dominated by Ericsson, Nokia, Siemens and Motorola.

And Britain incumbent carrier BT Group late April announced it had selected Huawei as one of eight preferred suppliers for its US$20 billion next generation network.

Huawei yesterday announced the global release of the Quidway ME60 MSCG (Multi-Service Control Gateway), its flagship product for next generation IP networks.

Analysts believe Huawei's low-cost but high-quality products are gaining increasing favour from operators in developed countries, which previously had doubts about the firm's products.

Li said Europe is the top priority in overseas expansion.

"We believe we will be able to have a big win in the European market in the coming years," he said.

Huawei will mainly depend on increasing localization, partnering with local customers and responding quickly to the local market to fuel its expansion in Europe, he added.

The official also announced that Huawei's return on net assets, audited by KPMG, rose to 31 per cent last year from 23 per cent in 2003.

Its net income increased to US$624 million from US$384 million a year ago.

Its expenditure on research and development hit US$487 million last year, compared to US$389 million in 2003.

Huawei's cash flow from operations in 2004 stood at US$396 million compared to US$385 million in the previous year.

(China Daily June 22, 2005)