2degrees technology supplier posts 30pc increase in profit

The Chinese company that provides the technology for 2degrees' mobile network has announced a 30 per cent rise in profits.

Huawei Technologies recorded a net profit of 23.8 billion yuan ($4.6 billion) in 2010, up from 18.3 billion yuan the year before. According to the company's annual report, its revenue increased by almost a quarter to 185.2 billion yuan.

Huawei equipment is the foundation of 2degrees network infrastructure.

In February, the telco signed a deal with Huawei as part of a $100 million expansion of its network.

The build will extend 2degrees' coverage and pave the way for fourth-generation (4G) mobile internet.

Huawei also manufactures the IDEOS smartphone range that 2degrees began selling at the start of this year.

The Chinese company increased international revenue despite its effort to expand in the US being opposed by American lawmakers. In February, the technology firm had to drop its purchase of patents from California-based 3Leaf Systems after a recommendation by the Committee on Foreign Investment in the United States.

Before 3Leaf, Huawei failed in bids to acquire two other United States companies between 2008 and 2010.

Huawei's international sales jumped 34 per cent to 120.4 billion yuan last year, while its sales in China gained 9.7 per cent to 64.8 billion yuan.

The China market declined to 35 per cent of Huawei's sales last year, from 40 per cent in 2009.

The announcement sees the firm close the gap with global market leader Ericsson AB to less than two weeks of sales.

In US dollar terms, the remaining gap in total revenue of about US$930 million ($1.1 billion) between Ericsson and Huawei is equal to less than two-week's worth of Huawei's weekly sales of about US$526 million last year

Huawei, which did not win its first contract outside China until 1997, achieved international sales of more than US$100 million by 2000.

Huawei was founded in 1987 by Ren Zhengfei, a former officer in China's army, who established the firm with 21,000 yuan of capital.

Ren still runs the company and was named by Bloomberg as one of China's most powerful men in 2009.

- additional reporting by Bloomberg