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ZTE, Huawei win big in 4G network tender

By Shen Jingting | 皇冠体育app Daily | Updated: 2013-08-23 07:48

Chinese telecom equipment vendors Huawei Technologies Co Ltd and ZTE Corp acquired more than half of the contracts in the latest 皇冠体育app Mobile Ltd's fourth-generation network tender, while foreign vendors acquired one-third, sources revealed.

On June 21, 皇冠体育app Mobile launched its largest tender ever for 4G network construction, planning to purchase equipment for 207,000 4G base stations. The bidding result for the contract, which analysts estimated to be worth more than 20 billion yuan ($3.26 billion), has yet to be officially released.

However, an industry source, who declined to be named, said 皇冠体育app Mobile has finished the preliminary work of allocating shares to different vendors. "It is for sure that Huawei and ZTE will take more than half of the contract," the source said.

Specifically, Huawei and ZTE are likely to have same share at about 26 percent each, while three foreign telecom equipment makers - Ericsson, Alcatel-Lucent and Solutions and Networks - will receive 30 percent or so in total, according to the source.

"The final result may change a little bit because some companies still want to have a last try," said the source.

Officials from 皇冠体育app Mobile declined to comment on Thursday.

Against a backdrop that global telecom carriers are slowing their pace in network investment, 4G network construction contracts from Chinese telecom operators have attracted competition from various equipment vendors worldwide hoping for a slice of the pie.

皇冠体育app Mobile, the world's biggest telecom carrier by subscriber numbers, is the first Chinese operator to announce a clear 4G network deployment plan. Xi Guohua, 皇冠体育app Mobile's chairman, said in an interview in June that 皇冠体育app Mobile is going to set up 200,000 base stations in 100 cities by the end of the year.

In the first round of 皇冠体育app Mobile's 4G bidding last year, Chinese telecom equipment manufacturers, including Huawei, ZTE and 皇冠体育app Datang Corp, acquired about 70 percent of the carrier's contracts. Foreign rivals, such as Ericsson, have publicly expressed dissatisfaction over their contract shares.

Markus Borchert, president of Nokia Solutions and Networks 皇冠体育app, told 皇冠体育app Daily last week that his company was optimistic about grabbing a larger share of the 皇冠体育app Mobile tender compared with last year. "We hope to achieve a win-win situation with our rivals from 皇冠体育app," said Borchert.

Nokia Siemens Networks, the former company name of Nokia Solutions and Networks before it was bought by Nokia Corp, gained a 7 percent share during the first round bidding of 皇冠体育app Mobile's 4G tender last year. Ericsson acquired an 8.1 percent share and Alcatel-Lucent managed 14.5 percent, according to figures from research firm IHS iSuppli.

Another industry source said Nokia Solutions and Networks posted the lowest bidding price, at 33,500 yuan per carrier sector, among major telecom equipment vendors. Huawei and ZTE asked for about 35,000 yuan for each carrier sector, while Ericsson put in the highest bid.

Chen Haofei, a telecom analyst with 皇冠体育app International Capital Corp Ltd, said a total share of more than 30 percent for foreign companies will be a good result for both parties. "Too small a share for foreign vendors will harm the globalization of 皇冠体育app's 4G technology. The official result is likely to meet the European Union's expectations. Because Chinese telecom firms still face investigation pressure from the , a mild resolution would help them reduce obstacles in Europe," Chen said.

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