Huawei pushes into Europe with 3G deal
(China Daily)
Updated: 2004-12-10 13:51

China's largest telecoms equipment maker, Huawei Technologies, clinched its first European contract for a third-generation mobile network yesterday, underlining its threat to bigger international rivals.

In a deal an industry source valued at 200-400 million euros (US$266-US$533 million), Huawei will build a 3G mobile phone network for unlisted Dutch carrier Telfort.

The 10-year contract with Telfort, the smallest of the Netherlands' five mobile carriers, is Huawei's first in Europe involving a network based on the 3G (third generation) UMTS standard known as WCDMA.

The agreement, which also involves the creation of a research and development centre in the Netherlands, gives Huawei a European beachhead to compete in markets dominated by major equipment suppliers like Motorola, Ericsson and Nokia.

Huawei has contracts for networks based on the WCDMA standard in the Middle East, Hong Kong, Mauritius and Malaysia.

In an interview with Reuters, Telfort Chief Executive Ton aan de Stegge would only say the network deal was worth hundreds of millions of euros. A Huawei spokesman declined to comment on the value of the contract.

In its 3G Hong Kong deal with Sunday Communications, the smallest of the city's six mobile carriers, Huawei provided a large amount of financing as part of the overall sale.

A Telfort spokeswoman declined to say if equipment financing was part of the deal.

"Telfort's strategy is to challenge the established norms of the mobile industry, and this contract, which is the first of its kind in Europe, is exactly in line with that," aan de Stegge said.

"Huawei will give us a much more innovative infrastructure than what the established players are offering."

Aan de Stegge has previously said he had a difficult time coming up with a business case to roll out 3G services, but yesterday he said the growing use of data services would justify the necessary investments.

Huawei, seen as one of China's fastest rising stars in its field, has embarked on a major export campaign in a bid to keep up its breakneck growth.

Most of its international deals so far have gone to less developed markets, like the Middle East and Africa.

Huawei said in September its sales could grow as much as 45 per cent to US$5.5 billion this year, with exports doubling to up to US$2.2 billion.

It said Western Europe would be a focus for the next two years, as mobile operators there build out 3G networks based on the WCDMA standard.

Its customers in Europe include BT Group and France Telecom, though neither have announced major purchases to date. The company also works in the market with Germany's Siemens.

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