Huawei says applying 5G technology to business was more difficult than expected

SHANGHAI — Huawei’s Chief Financial Officer Meng Wanzhou said Wednesday that applying 5G technology to business was more difficult than she had expected.

One of the expectations for 5G connectivity is that beyond faster mobile phone connections for individual consumers, the technology can better enable self-driving vehicles and factory automation.

Meng said the challenges of bringing 5G to business was underestimated and that it’s completely different than previous 2G, 3G or 4G generations. She said only when 5G becomes part of the ecosystem can it be possible to realize operations at scale.

Meng was speaking at a keynote session at the Shanghai Mobile World Congress on Wednesday, where she spoke broadly about the benefits of 5G to consumption and the economy.

The Chinese smartphone maker has sought to sell cloud services to specific industries such as mining and finance.

The company broke out figures for its cloud computing business for the first time in 2022, and said revenue for the unit came in at 45.3 billion Chinese yuan ($6.25 billion) last year.

“When you compare MWC Shanghai and MWC Barcelona [earlier this year], one interesting aspect is you find a lot of the case studies are universal, global,” said Winston Ma, author of “The Digital War: How China’s Tech Power Shapes the Future of AI, Blockchain and Cyberspace.”

Speaking on the sidelines of Shanghai MWC, he said Chinese companies’ need to compete could spur greater adoption of 5G.

“So I think the Chinese companies are probably more ready, are more willing to test new 5G applications,” said Ma, who is also an adjunct professor of law at New York University.

“But of course there will be barriers for whatever industry, especially for the traditional industries, they have their existing ecosystem.”

Last year, Huawei saw its biggest annual decline in profit as U.S. sanctions hit its business and China’s Covid-19 controls weighed on the local economy.

In May 2019, the Trump administration put Huawei on a blacklist that restricted U.S. companies from selling technology to the Chinese company due to national security concerns. Huawei has denied it poses such a threat.

The U.S., U.K. and Australia, have also banned Huawei from operating in their 5G networks. Earlier this month, a top EU official called for more members of the bloc to do so. Germany is among the countries that have not yet restricted Huawei from its local 5G network.

Meng, the daughter of Huawei’s founder, returned to China in 2021 — after about nearly three years of being detained in Canada at the request of the U.S. In addition to being Huawei’s CFO, she is also deputy chairwoman of Huawei’s board and rotating chairwoman.

— CNBC’s Arjun Kharpal and Ryan Browne contributed to this report.

Correction: This story has been updated to show that Huawei saw its biggest annual decline in profit last year.