My Interview with Abel Deng, CEO of Huawei Thailand (1 of 3)(Asia Tech Strategy – Daily Article)

Last week, I went to the Huawei headquarters in Bangkok and interviewed Thailand CEO Abel Deng. It was a fascinating discussion and it really got me thinking about two questions:

  • What is the next generation of digital infrastructure going to look like in SE Asia?
  • What new digital businesses will this make possible?

I’ve written a lot about Huawei in the past couple of years. I’ve interviewed their rotating Chairman and other executives in Shenzhen. And they were profiled in my One Hour China Book. But much of the discussion about Huawei has been overshadowed by politics and the US-China arguments. That’s a mistake. Because Huawei is one of the small handful of global tech companies that is actively developing and deploying the next generation of digital infrastructure. What they are building is a good indicator of what’s coming next.

Here’s my take on what’s going on with Huawei. Note: the below comments are my assessment and these are not from Abel Deng or Huawei

For digital infrastructure, Huawei uses the phrase “ubiquitous connectivity, pervasive intelligence”, which is pretty good. Everything is going to be connected to everything else. And intelligence (cloud + AI) is going to run through it all. In practice, that means:

  • Smart devices – including smartphones wearables, and smart home devices.
  • Connectivity – including wireless networks (5G, 4G and below), Internet of Things and fixed networks.
  • Cloud and AI – providing the computational power and intelligence.

Within this business, Huawei positions itself as a provider of end-to-end solutions, everything from devices to connectivity to cloud. That makes a lot of sense in certain industry verticals, such as financial services, transportation, etc. But it also means they compete with major companies on each level of the tech stack. For example:

  • Amazon, Microsoft, Google. Alibaba and Tencent are competitors in cloud.
  • Ericsson and Nokia are competitors in telecommunications equipment.
  • Samsung, Apple, and many others are competitors in smart devices.

Huawei has also been international since the 1997 with the majority of its revenue long coming from outside of China. However, the recent issues with the US entity list have altered the geographic focus of their business.

  • Smart devices and the consumer business have decreased internationally. Smartphones are hard to sell in the EU without Google Mobile Services and high-end semiconductors. Although the consumer business has really increased significantly in China to compensate.
  • The telecommunications equipment business has shifted its focus to certain geographies. Markets like the UK and Japan have became more political in their ICT contracting. We now hear a lot more about Huawei in SE Asia and Eastern Europe.

Which brings me to the topic of Huawei in Thailand, which has likely (a guess) become much more of a priority to the company in the past 2-3 years. And in Thailand, we see an interesting competition between the tech giants of China and the West. In cloud, we see Huawei but also Google Cloud and AWS. For smart devices, we see Apple and Samsung but also Oppo, Vivo and Xiaomi. And in telecommunications we have a serious race to deploy 5G. Thailand is one of the fastest movers in this regard. It’s really interesting for a guy who studies competition.

Ok, with that introduction, let me jump to my discussion with Abel.

Abel Deng’s Journey from Shenzhen to Bangkok, via Kinshasa

Abel Deng is a friendly and engaging guy. Plus he dresses a lot better than I do. I met him at the Huawei headquarters in Rama IX in Bangkok, where we sat down for coffee and later Hunan food.

What immediately jumped out at me is he is a good example of Huawei’s culture and talent development system. I’ve written a lot about Huawei’s culture and its HR policies. For example:

Founder Ren Zhengfei has long talked about how people are Huawei’s only real resource. I have long argued that culture is Huawei’s secret advantage. Many of Huawei’s products will become obsolete in 5-7 years. It’s just the nature of technology. Base stations will get smaller. Smartphones will get even better cameras. And all the talk about 5G will shift to talk of 6G. This means that the company’s only real resource is the people who continually create new products and continually recreate the company.

For decades, Huawei has been building a culture and HR system that systematically identifies and develops high performing executives – who become completely dedicated to the company for their entire career. At that is very unusual for Chinese companies, where most people switch jobs after 1-2 years. Abel struck me as great example of Huawei’s culture and system. And I think his career story illustrates that.

Here’s Abel’s background.

He is originally from Zhuzhang, Hunan, which is just south of the provincial capital of Changsha. Hunan is not really on the tourist route but it is a really great place. In fact, the whole central region of China (Changsha, Chengdu, Chongqing, and Kunming) is fantastic. It’s pretty much my favorite part of China (outside of Shanghai). Things are also really developing there right now. A lot is happening in Chongqing. Chengde is becoming a food and artistic city. The Chinese government has also just announced a new financial center for the region(?). Plus, Hunan food is outstanding if you like spicy food. It’s neighbor Sichuan gets more attention, but I go for Hunan dishes every time.

For university, Abel moved to Tianjin in the north and attended Nankai University. He spent seven years studying business management. And prior to graduation, he made a somewhat last-minute decision to interview with Huawei.

He did several interviews with the company. But he says what got his attention was that he received an offer with 5 days of his first Huawei interview. He cited the speed of the company as one of his reasons for joining. He was then moved almost immediately to Shenzhen for training, resulting in him missing his own graduation. After just two weeks of initial training and the cultural orientation, he was asked if he had a passport (he did) and was informed he was going to the Congo (DRC). So, he was hired within 5 days of his first interview and he was on a plane to Kinshasa within two weeks of joining. He says he didn’t tell his parents exactly where he was going until later.

It is a bit hard to explain to non-China audiences how intense this company is regarded to be in China. Everyone knows Huawei moves very fast, even by China standards. Everyone knows it’s an intense place to work. You’ll often hear about how life in China tech is 996 (you work 9am to 9pm, 6 days a week). That would be a slow week at Huawei.

Abel ended up spending +10 years in Africa. He began by working on a new 3G telco network for the Congo, which he says was one of Huawei’s largest projects at the time ($120M?). He ended up being in the Congo during two different civil wars, where he got to listen to rockets and gunfire in Kinshasa. He also got malaria three times in one year while there.

You hear these types of stories often for Huawei. You often hear phrases like “wolf culture” and “wolf spirit”. The title of Huawei’s self-published book is “Dedication“. They are strangely proud about being able to endure and do the hardest things, like putting base stations on Mt. Everest. They are well-known for being the last foreign company to ever leave war torn areas like Libya. And that is if they leave at all, which is usually not the case.

Abel was later promoted to CEO of five African countries (Mauritius, Madagascar, Botswana, Seychelles, and Comoros). He was starting to become an expert in managing both smaller and more difficult countries. And after 1.5 years, he was returned to Shenzhen where he oversaw the company’s “small” and “harsh” countries.

And in 2019, he was informed he was taking over as CEO of Thailand. And, no, Huawei doesn’t really ask. As far as I can tell, they just sort of tell you where you’re going. Or they ask but people are expected to say yes.

I routinely tell people that both Huawei and Alibaba have very strong cultures for companies of such large size. Alibaba tends to be creative. Huawei is more about dedication and being able to do and take what others cannot. You never really want to compete with either of them.

Ok. Let me switch to what Huawei is doing in Thailand. That should give you a pretty good picture of the digital infrastructure that is being built in SE Asia.

Huawei’s History in Thailand

Founded in 1987, Huawei first went international in 1997. They first began expanding across Asia, mostly in fixed line networks. And they opened in Thailand in 1999.

Huawei is often cited as the first international Chinese company, which is pretty true. They went international earlier and more aggressively than any other company. But it also had a lot to do with the fact that they were outgunned in their domestic telecommunications market by international players like Ericsson and others. It’s also why the projects they did target in China were usually not major clients in Shanghai or Beijing. Instead, they went after small hotels and office buildings in third and fourth tier cities. Going international was a lot about avoiding competitors and out of necessity. I think you can see a lot today’s culture in the early years when the company had to go after projects that other companies weren’t interested in or were too hard.

So, Huawei arrived in Thailand in 1999. Back then the company, like most Chinese manufacturers, the company was mostly doing inexpensive equipment. The first two decades of international China were mostly about connecting the domestic manufacturing base with foreign markets. The company also offered associated services, maintenance, and technical support in Thailand.

Here are some key points for Huawei’s history in Thailand:

  • 2005-2013: They opened training centers. As mentioned, this is ultimately a people business. Developing local Thai talent was important back then and has become increasingly important in digital.
  • 2014-2016: Huawei built Thailand’s first 4G network.
  • 2017-2019: Huawei was the first cloud provider to open a local data center. The first was in the Eastern Economic Corridor and the next two have been in Bangkok. This was an important move, which will be discussed in Part 2.
  • 2020:
    • Huawei established the Huawei ASEAN Academy for regional training and local company incubation.
    • They partnered with NT to jointly build Thailand’s government cloud.
    • They established the 5G Ecosystem Innovation Center (with DEPA). Also important. Will discuss in Part 2.
    • They held the first Huawei Cloud Connect summit in Thailand.
  • 2021: The Thai Prime Minister awarded Huawei the “Digital International Corporation of the Year Award”. Abel was the one who received the award from the Prime Minister.

Things are definitely accelerating. And it looks like it was just 2.5 years from when Abel took over to when the company received an award from the Prime Minister.

I think that is enough for Part 1. In Part 2, I’ll go into Huawei’s 4 big projects here in Thailand. I think that is gives a good picture for how digital infrastructure is going to develop in SE Asia. And that will mostly be statements by Abel and Huawei. All of the above comments are my assessment and are not from Huawei. 

Cheers, Jeff

———

Related articles:

From the Concept Library, concepts for this article are:

  • n/a

From the Company Library, companies for this article are:

  • Huawei Thailand

——–

I write, speak and consult about digital strategy and transformation.

My book Moats and Marathons details how to measure competitive advantage in digital businesses.

I also host Tech Strategy, a podcast and subscription newsletter on the strategies of the best digital companies in the US, China and Asia.

This content (articles, podcasts, website info) is not investment, legal or tax advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. This is not investment advice. Investing is risky. Do your own research.

Leave a Reply