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Huawei mulls float of local arm

CHINESE technology company Huawei aims to float its Australian arm in the next five to 10 years, hoping to resurrect its chances of supplying equipment to the national broadband network.

Listing on the Australian Securities Exchange is the final step in Huawei's long-term plan to cement its local credentials and ease fears it is owned or influenced by the Chinese government.

John Brumby, a director of Huawei Australia and former Victoria premier, mentioned the possibility of listing at a business forum in Sydney yesterday.

''There are two things on the horizon for our board,'' he said.

''One is at an appropriate time to see a major Huawei investment in a research and development centre here in Australia.

''Second, I would hope in five years to 10 years' time we would see a local float of the business.


''That would do much to dispel any concerns that may remain about Chinese investment or Huawei; to give Australians an opportunity to invest in the second-largest IT company in the world.''

Mr Brumby said it was ''disappointing'' for Huawei to be excluded from the NBN because it ''sees itself as a leader in innovation and new technology in the same way as IBM and Cisco do''.

He said he respected the government's decision to exclude Huawei on national security grounds.

''Having said that, we hope that in the future there will be opportunities for us to participate in the NBN [and] that we can work through some of these obstacles and difficulties,'' Mr Brumby said.

Winning a supply contract for the NBN would help Huawei convince other governments it is not a national security risk.

Australia has been a test-bed for Huawei's government relations after it set up its first local board here last year. The three-member board contains Mr Brumby, former Liberal minister Alexander Downer and retired rear admiral John Lord.

BusinessDay understands Huawei's global board is looking at rolling out the ''Australian model'' in other countries, with boards containing locals with connections to politics and security communities.

While Huawei's global revenues in 2010 were $US32 billion, in 2011 its Australian revenues were $230 million and it booked a profit of just $3.6 million. It spent about $132 million on supplies - presumably from its parent company - according to its records. In August the local board agreed to reinvest all local profits into Australian projects.