Huawei projects 10 pct average growth over 5 years

Its 2012 sales increase 8 percent to $35.5b, while profits jump 32 percent

Huawei Technologies Co, the Chinese telecom giant, has forecast revenue growth will average 10 percent annually over the next five years.

Releasing its annual report for 2012 on Monday, it said sales rose 8 percent to 220 billion yuan ($35.5 billion) last year.

Huawei also posted a 32 percent jump in net profit to 15.38 billion yuan during the period.

Guo Ping, acting chief executive officer, said it met its business performance expectations through improved operational efficiency.

He expressed confidence in future growth based on the market's ongoing demand for ubiquitous connections.

"Information and communications technology will continue to grow, with new opportunities coming from cloud computing big data, and feature phones being replaced by smartphones at a faster rate," Guo said in a statement.

Huawei's founder Ren Zhengfei attributed its performance during the past 25 years to "gaining might from a small hole", explaining that water under high pressure can be spurted from a small hole to cut steel plate.

Huawei and its 150,000 employees, he said, pursue the duel target of focusing on customers and lifting competitiveness.

The global telecom industry was sluggish last year because many telecom operators cut their spending.

Huawei's big Chinese rival ZTE Corp booked a net loss of 2.84 billion yuan in 2012, down from a net profit of 2.1 billion yuan the previous year.

Ericsson AB, the world's largest vendor of wireless networks, said its net profit dropped 53 percent to $930 million in 2012.

Zhao Hailin, a telecom analyst at research firm IHS iSuppli, said: "Huawei's stand-out performance was largely because the company tightened its internal management.

"Huawei also gave up its 'pricing war' strategy to some extent, and focused on profitable contracts."

He added that Huawei had also shifted its focus to high-end, more-complex product lines, which had delivered bigger profit margins.

Huawei entered the world's top three smartphone makers for the first time in the fourth quarter of last year. It shipped 32 million smartphones in 2012, a 60 percent year-on-year increase.

Richard Yu, Huawei's consumer business group chief executive officer, earlier reiterated Huawei's plan to increase its share of the high-end smartphone market, going head-to-head with Apple Inc's iPhone handsets and Samsung Electronics Co's Galaxy series.

"Huawei is one of a very few Chinese companies that compete globally on their own innovation," said Xiang Ligang, the president of telecom industry portal, cctime.com.

In 2012, Huawei invested 30.09 billion yuan, or 13.7 percent of total sales revenue, on research and development.

The company has now established 16 R&D centers and 28 joint innovation centers around the world.

China remained Huawei's biggest single country market in 2012, where sales increased by 12 percent year-on-year to 73 billion yuan.

Its business demonstrated robust growth across all three of its business groups: carrier networks, enterprise and consumer.

The carrier network sector remained its biggest earner, achieving 160.1 billion yuan in sales, an increase of 6.7 percent year-on-year.

"But there is little hope for Huawei expanding in the US operator market," Xiang said, largely due to political and security concerns from the US side.