Huawei, ZTE win bulk of China Mobile's $3 billion 4G bonanza: sources

Fri Aug 23, 2013 12:14am EDT
 
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By Lee Chyen Yee

SINGAPORE (Reuters) - China Mobile Ltd has awarded initial 4G contracts worth around 20 billion yuan ($3.2 billion), with Chinese firms securing more than half of the biggest prize in the global telecoms industry this year and foreign firms winning about a third, industry sources said.

Telecoms equipment makers, such as global leader Ericsson and Huawei Technologies Co Ltd, have been waiting for China Mobile's 4G tender to lift the fortunes of an industry that has been hit by a lack of spending worldwide.

The development of a 4G network by the carrier, which with more than 700 million mobile customers is the world's largest by subscribers, is also regarded as key to it clinching an agreement with Apple Inc to carry its blockbuster iPhone.

"This is the tender that global telecom equipment vendors have been vying for this year," said an industry source.

"Even though we see Huawei and ZTE getting the bulk of the contracts and foreign vendors getting around a third, I'm sure they will keep going back to China Mobile and get a bit more share."

Shenzhen-based Huawei and crosstown rival ZTE have obtained about 25 percent each of the total 4G procurement in China Mobile's tender this year, said the sources, who are familiar with the negotiations but declined to be identified because they are not authorized to speak to the media.

European vendors Ericsson, Alcatel-Lucent SA and Nokia Siemens Networks (NSN) have obtained a share of around 10 percent each, the sources said.

The first wave of 4G investments that began in 2010 in Japan and Korea favored Ericsson and NSN, while the second in the United States went largely to Ericsson and Alcatel-Lucent. Huawei won a chunk of Europe's 4G contracts last year.   Continued...

 
A man looks at a Huawei mobile phone as he shops at an electronic market in Shanghai January 22, 2013. REUTERS/Carlos Barria