Huawei’s Growing Presence in Central Asia’s Telecom Industry

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Huawei’s Growing Presence in Central Asia’s Telecom Industry

In both Kazakhstan and Uzbekistan, Huawei has positioned itself as a major player in the telecommunications market.

Huawei’s Growing Presence in Central Asia’s Telecom Industry
Credit: Depositphotos

In the wake of Western sanctions, Huawei has pivoted toward emerging markets, including within Central Asia. The invasion of Ukraine has further underscored the need for adaptability, prompting Huawei to strategically relocate some of its Moscow office staff to Kazakhstan and Uzbekistan to avoid secondary sanctions while still maintaining research and development (R&D) offices across Russia. 

Among the relocated staff are managers and heads of Huawei divisions from China, who were originally assigned to Russia at the beginning of 2022 but were subsequently redirected to other offices. This move complements Huawei’s expansion efforts in the Middle East, encompassing also the Central Asian region.

Huawei’s construction of 4G networks and testing of 5G technology in Kazakhstan have positioned it as a critical player in the nation’s telecommunication sector, overshadowing competitors like Swedish Ericsson and Finnish Nokia. 

In an interview, a former Huawei employee shared that the company’s aggressive policies contributed to its market dominance in the country. They noted, “Our government was also very close to China, received a lot of loans, [China] built roads in Kazakhstan, factories are now in construction. Accordingly, the Chinese lobby is very strong.” 

Similarly, in Uzbekistan, Huawei’s partnerships with almost all key Uzbek telecom operators – Uztelecom, Unitel, Ucell, Perfectum Mobile, and East Telecom – demonstrate its dominant role in the telecommunications sector. 

In 2019, during a visit to Huawei’s R&D center in Beijing, Uzbekistan’s President Shavkat Mirziyoyev called for efforts to introduce 5G to Uzbekistan. Over the past two years, Huawei has helped deploy 5G networks jointly with Uztelecom, Mobiuz, and Ucell. During preparation for the summit of the Shanghai Cooperation Organization (SCO) in 2022, Uztelecom launched 5G networks in the tourist center of Samarkand using Huawei equipment. Other demonstration projects have included Huawei’s “smart” agriculture pilot project, implemented with the National Research University. Uzbektelecom has also signed contracts with Chinese companies Huawei and ZTE to implement four investment projects worth $506.8 million.

Beyond facilitating the rollout of hard infrastructure, Huawei has also been investing in local talent. In Kazakhstan, the number of Huawei ICT Academies is set to double from 25 to 50 by 2025, providing training for 5,000 students nationwide in critical areas such as artificial intelligence, big data, network security, wireless networks, and cybersecurity. Additionally, Kazakhstani ICT specialists have joined Huawei’s Corporate Social Responsibility program and have visited China to learn about the company’s cutting-edge ICT and to experience China’s traditional and modern culture. 

Universities are increasingly aligning themselves with market trends by establishing vendor-sponsored programs on their campuses. A coordinator at one of Kazakhstan’s leading IT universities revealed that over 100 students have enrolled in Huawei’s courses, while fewer students opt for programs offered by vendors such as Oracle, Kaspersky, and Cisco.

In Uzbekistan, one of Huawei’s key initiatives is its annual ICT Competition, “Seeds for the Future,” aimed at students and professionals in the ICT field. In 2020-2021 the event was attended by 50 students of Uzbekistan from universities with IT directions. Additionally, Huawei has established an important new ICT Academy at Inha University in Tashkent.

Huawei’s developments are in line with the ambitions of both Kazakhstan and Uzbekistan to position themselves as digital hubs. The current Kassym-Jomart Tokayev regime in Kazakhstan recognizes the pivotal role of education, especially in STEM and IT, as potential catalysts for bridging economic disparities, preventing future unrest, and maintaining social and regime stability. Likewise, Uzbekistan’s government has been implementing ambitious plans to transform the country into a digital hub through its “Digital Uzbekistan – 2030” strategy.

Huawei has thrown its weight behind ambitious plans in Kazakhstan to train 100,000 IT specialists through various courses, the benefit of which for the economy might reach $500 million. In support of these educational objectives, Huawei’s Information and Communication Technology Academies, which collaborate with institutions globally, are an excellent potential aid to Tokayev’s initiative. In a meeting with the company’s leadership, Tokayev endorsed the revitalization of ICT Academies, which are based at Kazakhstani universities and offer vendor knowledge, equipping students and staff in the IT sphere with certifications tailored to industry requirements. 

However, university program coordinators hosting Huawei’s ICT Academies in Kazakhstan have indicated in interviews that the focus primarily lies in training top students to become program trainers working in foreign branches of Huawei rather than fostering R&D at home. 

Huawei’s courses, it appears, are geared more toward producing administrative staff than nurturing R&D talent. In one interview, the coordinator of Huawei ICT Academies at a university in Kazakhstan explained, “We need to engage in research and educate individuals on how to construct systems like Huawei’s — we have to do things the other way around.” 

According to this coordinator, any vendor-sponsored education, including Huawei’s, aims to instill the habit of using their technology from a young age so that students will naturally gravitate toward it in the future. Interviews suggest that Huawei’s investment in the essential IT infrastructure of these universities remains minimal, although there are indications that Huawei  has started to invest in areas such as sports programming and cybersecurity. 

For local talent, it remains a challenge to attain high-ranking positions within Chinese companies. Instead, Chinese nationals often fill these roles. “Two directors work on any project, one is local, and the other is Chinese, who ensures that everything is done according to the official line of China,” said a previous Huawei employee. Rather than professional skills, knowledge of the Chinese language is key for career growth. 

Beyond the lack of R&D investment, there are also concerns about data flowing to China, which raises questions regarding state access and personal data protection. “If the data ends up in China, the state has wide access. If Huawei sends some data to China for analysis, personal data is not protected from the state,” said a Kazakhstani software engineer trained in Nanjing. 

These data concerns are particularly prevalent in the case of Huawei’s “Safe City” infrastructure, which feature surveillance cameras with facial and license plate recognition capabilities and are predominantly manufactured in China.

On April 25, 2019 Uzbekistan’s Mirziyoyev visited the Huawei Research and Innovation Center as part of his participation in the second Belt and Road Forum for International Cooperation. Following on from agreements signed as part of that visit, an Uzbek-Chinese joint venture (JV) with an authorized capital of $2 million was established for the purpose of constructing a “Safe City” complex in Tashkent. The companies “Costar Group Co. Ltd” and “CITIC Guoan Information Technology Co. Ltd” own 42 percent of the JV, with the state of Uzbekistan owning shares in the amount of 58 percent.

The safe city attracted direct investments in the amount of $300 million and according to the project’s “road map,” Huawei is defined as the main supplier of goods and services. The Ministry of Information Technologies and Communications Development was designated as the authorized state organization for maintenance and technical support of the integrated system, which involved a data processing center, mandatory integration of state information systems into the “Safe City” system, surveillance of traffic violations, and monitoring of residences. 

It is unclear which of these steps has been implemented, but as a result of the road map, Huawei secured a contract with the government of Uzbekistan valued at $1 billion to advance the country’s surveillance infrastructure. Since 2014, approximately 500 Chinese cities have initiated transformation projects to become cyber-integrated “smart” cities. And now Chinese tech giant Huawei has moved to export its systems to Uzbekistan.

According to a former Huawei employee in Kazakhstan, Chinese companies such as Huawei “can use resources to pump data. The Chinese company, for example, creates a VPN and duplicates data. In one oil and gas project, China requires every picture from CCTV cameras to be duplicated in China.”

The increase in Chinese economic influence in Kazakhstan and Uzbekistan is leading to the domination of companies like Huawei in critical infrastructure sectors such as telecommunications and IT-related hardware. 

These countries rely on companies such as Huawei in order to become digital hubs, but as the example of Kazakhstan demonstrates, in order to truly advance this goal, investment in R&D talent is needed – not something not necessarily at the top of Huawei’s agenda. Additionally, there are clear risks associated with dependence on Huawei’s surveillance technology.

This article was produced as part of the Spheres of Influence Uncovered project, implemented by n-ost, BIRN, Anhor, and JAM News, with financial support from the German Federal Ministry for Economic Cooperation and Development (BMZ).