Chinese telco giant to invest $400m in NZ

Huawei has been involved in a number of major projects in New Zealand including building 2degrees and Spark mobile networks.

Chinese telecommunications group Huawei Technologies will spend $400 million over the next five years to help drive local research and development and support the construction of a cloud data centre.

Economic Development Minister Simon Bridges and Tertiary Education, Skills and Employment Minister Paul Goldsmith today announced the investments as the Chinese firm becomes firmly entrenched as a major telecommunications equipment vendor in New Zealand.

Some $250 million of the funds is being earmarked for procurement in local companies, with the rest going into a cloud data centre to be built with New Zealand firms, the opening of an Innovation Lab at Victoria University in Wellington, building an Innovation Lab in Christchurch and expanding the Seeds for the Future University Student Programme to a further 100 ICT students.

"The depth of the investment will touch many areas of the economy and open up global opportunities for New Zealand," Bridges said in a statement.

"The initiatives that Huawei is committing to will also help strengthen our research and development activity and capability building in the digital and technological world."

Huawei founder Ren Zhengfai met Prime Minister Bill English to discuss the investments ahead of a major Chinese delegation led by Premier Li Keqiang including senior ministers, government officials and business people.

English yesterday said he plans to use the meeting to build on the existing free trade agreement.

Ren visited New Zealand in 2013 when he was still chief executive of Huawei, meeting with various politicians to allay concerns that the world's biggest maker of telecommunications equipment posed no threat to cyber-security.

At the time, Huawei was accused of being a risk to US security in a Congress intelligence report and had stopped supplying equipment to American carriers.

He also used the 2013 visit to hold his first ever press conference, where he announced plans to set up a joint innovation centre with Telecom, now Spark New Zealand, where local experts would look at the needs of the market and Huawei's specialists figure out what technology could address them.

Huawei won a contract to build Lincoln University's telecommunications network last year and has been involved in a number of major projects including building mobile carrier Two Degrees Mobile's network and Spark's 4G mobile network.

The local Huawei holding company posted a profit of $3.1m in calendar 2015 on sales of $186.2m, compared to a profit of $3.3m on $132.7m of revenue in 2014, Companies Office filings show.