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Huawei Lands Another Euro Deal

Ray Le Maistre

Huawei Technologies Co. Ltd. has cemented its position as one of the most important telecom equipment vendors in the U.K. by landing a deal with Opal Telecom Ltd. , which plans to install its own broadband access equipment in up to 1,000 BT Group plc (NYSE: BT; London: BTA) local exchanges in the U.K. (See Opal Uses Huawei Gear.).

Opal is a subsidiary of major BT competitor Carphone Warehouse Group plc (London: CPW), which recently launched a "free broadband for life" offer to U.K. consumers that has met with significant demand from the British public. Now Carphone is building its own broadband capabilities, through the local loop unbundling (LLU) process, to meet that demand on its own network, and not have to rely on BT's infrastructure. (See Free Broadband Comes to the UK and Carphone Dials Up Rivals.)

Carphone has previously stated its intention to unbundle up to 1,000 of BT's exchanges over a three year period, but the initial deal between Opal and Huawei is for 500 sites in the first year. (See Carphone Reports Half Year.)

The vendor is providing its UA5000 multiservice access platform (MSAP), also known as the Honet, for broadband access. It supports TDM, Gigabit Ethernet, and ATM, making it suitable to support legacy as well as high-speed broadband access services such as IPTV, according to a review of the product in a Heavy Reading report issued in October 2005, "MSAPs: A Heavy Reading Competitive Analysis."

Huawei is also supplying Opal with its Quidway 6506R Ethernet switch for aggregation. This will then feed traffic back into Opal's national optical network, which it leases from wholesale carrier Fibernet Group plc (London: FIB). (See Fibernet Upgrades Opal.)

Incidentally, Fibernet's WDM network is also based on Huawei equipment. (See FiberNet, Huawei Team.)

No value was given for the deal, but Carphone said last year it would be spending up to £15 million ($27.5 million) a year for the next three years building out its own broadband capabilities, and Huawei looks like it's getting the lion's share, if not all, of this capex. The vendor will provide, install and then support the new access network.

Neither Huawei nor Opal had responded to requests for further information as this article was published.

This latest deal also means that even more of Britain's new telecom infrastructure is based on Huawei gear.

The vendor is providing broadband access equipment and WDM gear to BT for the access and transmission portions of the incumbent's next-generation network project, the 21CN, and is also providing access technology to Tiscali UK -- another U.K. broadband service provider that is unbundling the local loop. (See BT Unveils 21CN Suppliers, BT's 21CN Deals: Booty or Bloody? , Unbundling Heats Up in UK, and Tiscali UK Unbundles With Huawei.)

The deal is another boost to Huawei's international sales, which are growing each year and now account for more than half the vendor's revenues. (See Huawei 2006 Target: $8 Billion.)

— Ray Le Maistre, International News Editor, Light Reading

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