Dear Colleagues:

In 2007, Huawei achieved global contract sales of USD16 billion or a 45% year-on-year increase, of which 72% came from international markets. Huawei achieved growth of more than 150% in developed markets such as Europe, the United States and Japan, while maintaining strong growth momentum in emerging markets including the Asia-Pacific region, Latin America, the Middle East and North Africa. Backed by several years of steady growth, Huawei has now become an undisputed industry leader. For this success, we gratefully credit our customers, our partners and our employees. Thank you all for your long-term trust and continuous support.

The world, as well as the information industry itself is becoming increasingly flatter as a result of fast evolving information technologies. Blurring initial borders, telecom networks, the Internet, digital media and consumer electronics industry are rapidly converging in the same direction. This trend exposes the conventional telecom industry to unprecedented challenges and forces operators to reconsider and transform their business operating models in order to maintain their position in the industry chain.

All-IP based FMC (Fixed Mobile Convergence) has become the consensus among most operators as the solution for continued transformation. All-IP architecture and convergence across every network layer will help operators simplify network structure, save transmission and operating costs and enable a wide variety of innovative applications. End users will be able to enjoy consistent communication experiences anytime, anywhere via any terminal.

Operators hope to gain new revenue streams through developing all-IP broadband services while enhancing profitability through optimizing competitive cost structures. Meanwhile, in many emerging markets, billions of people are still unable to access basic communication services. Operators are focusing on rapid coverage of low ARPU (Average Revenue Per User) areas. To succeed in this new industry environment, a demonstrated reliable equipment supply partner, capable of ensuring future-oriented transformation and providing ontarget solutions based on deep understanding of real world challenges, becomes essential.

Globally, regionally, and nationally, Huawei has proved to be such a partner. Providing critical support for operators in this age of all-IP convergence, we have established comprehensive strengths in all essential fields, from fixed and mobile network to continuous data communication technological innovation. Furthermore, we continuously introduce on-target and highly competitive products and solutions designed to enhance operators’ profitability and Total Value of Ownership (TVO). Universally, Huawei is committed to cooperating with industry chain partners to build a winning business ecosystem with operators at the core to ensure long-term competitiveness for all parties.

In retrospect, we truly understand your continued success is at the heart of our sustained growth. Going forward, Huawei will continue to advocate a corporate culture of dedication, and encourage employees to devote themselves to creating longterm value for customers through consistent hard work and innovation. Working together, we will all succeed in enriching life through optimizing communications across the world.

Executive Management Team  
Huawei Technologies Co., Ltd.