& cplSiteName &

Could Huawei Buy Marconi?

Light Reading
News Analysis
Light Reading
4/29/2005
50%
50%

Could Chinese vendor Huawei Technologies Co. Ltd. be lining up a takeover bid for troubled U.K. firm Marconi Corp. plc (Nasdaq: MRCIY; London: MONI) in the aftermath of BT Group plc's (NYSE: BT; London: BTA) 21CN contract award news? (See BT Unveils 21CN Suppliers.)

Although Light Reading hasn't found any evidence to back up this speculation, such a move would make sense according to analysts. Suggestions that Huawei is considering its current U.K. position were corroborated today when Huawei declined to discuss its groundbreaking involvement in BT's £10 billion ($19 billion) next-generation network plans.

Having been named as a primary supplier in BT's access and transmission categories, Huawei said it couldn't offer any executives for comment on the news as it is "working through several internal issues related to the details of this announcement." The company said it would be prepared to talk about its 21CN involvement late next week.

Huawei currently has several hundred employees in the U.K., few of whom are believed to have any operational experience with BT. Huawei needs a strong services and support team to back up its 21CN success, and needs it fast. BT has an aggressive project timetable, as it wants to switch off its current voice and data networks in 2010.

Marconi, conversely, has more experience of BT's current networks and culture than any other supplier, and has an existing and extensive support contract with BT (see BT Renews $656M Marconi Deal).

But it now finds itself facing a future without any work from a carrier currently providing a quarter of its revenues (see Marconi in Turmoil).

Its omission from the 21CN plans sent its share price tumbling by nearly 40 percent yesterday, and this morning it lost another 17 percent of its value, falling 52 pence to 246 pence on the London Stock Exchange.

That values Marconi at about £500 million ($950 million), half the £1 billion ($1.9 billion) it was worth before BT's shocking announcement.

Should Huawei make a move on Marconi now, it would not only get the vendor at a knocked-down price, but also buy itself into a number of European carrier accounts, a key goal in its international expansion strategy. Marconi counts the likes of Belgacom (Euronext: BELG), Cable & Wireless plc (NYSE: CWP), Deutsche Telekom AG (NYSE: DT), Telecom Italia SpA (NYSE: TI), and Telefónica SA, as well as smaller European operators, among its customers (see T-Com Selects Marconi , Telefónica Deploys Marconi DWDM, Marconi, Italtel Score at C&W, Belgacom Upgrades With Marconi, Marconi Lands Access Hub Deal, and Marconi Wins Polish MSAN Contract).

And the two companies know each other already, having forged a business and product development partnership in January this year (see Marconi Hitches a Ride With Huawei).

Heavy Reading analyst-at-large Graham Beniston reckons such a merger would "make sense. The BT win is such a shop window, as it's the first implementation of an IP NGN. And many analysts believe it's only a matter of a few years before other vendors, through outsourcing and overseas development, achieve the same economies of scale that Huawei currently has. Huawei needs to leverage an advantage in the short term, and this would be a good way of doing it."

Marconi declined to comment, and Huawei said it couldn't comment on questions related to Marconi.

One question that might be raised is whether the U.K. government would allow a Chinese company to acquire a major British company such as Marconi. It appears it would, as only weeks ago British government ministers were doing everything they could to persuade a Chinese car manufacturer to buy one of the U.K.'s industrial giants, carmaker MG Rover. That deal, though, fell through. (See this news story for background.)

— Ray Le Maistre, International News Editor, Light Reading

(29)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Page 1 / 3   >   >>
DZED
50%
50%
DZED,
User Rank: Light Beer
12/5/2012 | 3:16:55 AM
re: Could Huawei Buy Marconi?
The British government had no difficulty watching Bookham get up and walk out of the UK, taking bundles of Nortel and Marconi IP with it.

I can't imagine they would have a problem seeing Marconi go.

It is a bit of a surprise BT have dropped Marconi for Huawei when they have no experience with the legacy systems.
issey
50%
50%
issey,
User Rank: Light Beer
12/5/2012 | 3:16:55 AM
re: Could Huawei Buy Marconi?
So if Huawei won and critics say they don't have a support structure in place in UK then what the hell is several hundred people in UK doing? eating and drinking ??, What were BT's criteria if service as support isn't one of them ?
laserbrain2
50%
50%
laserbrain2,
User Rank: Light Beer
12/5/2012 | 3:16:51 AM
re: Could Huawei Buy Marconi?
interesting that the last bits of Marconi-Fore ATM business tends to be in US government contracts.

You gotta figure Huawei would be the last nail in the Pittsburgh coffin.
frzrmn
50%
50%
frzrmn,
User Rank: Light Beer
12/5/2012 | 3:16:50 AM
re: Could Huawei Buy Marconi?
A Marconi news release stated the company could not meet BT's commercial requirements.
frzrmn
50%
50%
frzrmn,
User Rank: Light Beer
12/5/2012 | 3:16:50 AM
re: Could Huawei Buy Marconi?
Should the Huawei/Marconi buyout take place, Bookham could get a huge boost. In addition to buying Marconi's optical business, Huawei represents more than 10% of Bookham's revenues, and in 2004 Bookham received Huawei's sole gold award.
jsittko
50%
50%
jsittko,
User Rank: Light Beer
12/5/2012 | 3:16:50 AM
re: Could Huawei Buy Marconi?
The should buy Tellabs or ADC.

I think Tellabs or ADC will be bought by somebody maybe Siemens or Fujistu.

Why?

Not technology. The customer contact list and entry into the door.. period.
OptoScot
50%
50%
OptoScot,
User Rank: Light Beer
12/5/2012 | 3:16:50 AM
re: Could Huawei Buy Marconi?
The suggestion that the UK Govt would step in to stop Marconi being bought by anyone is ridiculous. No White Knight would rush in from the City of London mainly because most of our financial institutions are foreign owned anyway. Apart from that they're too busy trading in hedge funds and other rubbish..... The UK has absolutely no concept of a loss of prestige. We are quite content to let other countries invest in and develop technology so we can buy what we want when we need it. Napoleon once said that England was a nation of shopkeepers and it won't be long before he's proven 100% right. We're up for sale - offers anyone?
zher
50%
50%
zher,
User Rank: Light Beer
12/5/2012 | 3:16:48 AM
re: Could Huawei Buy Marconi?
Totally agree, the tickets!!!

However, Marconi have more tickets than Tellabs or ADC I believe.
zher
50%
50%
zher,
User Rank: Light Beer
12/5/2012 | 3:16:48 AM
re: Could Huawei Buy Marconi?
Huawei doesn't do R&D in UK, a couple of hundreds of experienced people are not enough, but not that bad.

China is the second largest market for Cisco, guess how many Cisco employees in China? Less than 1000! I admit there are a lot of Cisco parters in China, my point is, several hundreds of people should not be too bad.

But anyway, to purchase Marconi at this moment is really a smart choice for Huawei.
zher
50%
50%
zher,
User Rank: Light Beer
12/5/2012 | 3:16:48 AM
re: Could Huawei Buy Marconi?
"It is a bit of a surprise BT have dropped Marconi for Huawei when they have no experience with the legacy systems. "

Well I would say, Huawei may not have experience on BT, but they do have lagacy system experience.
Page 1 / 3   >   >>
From The Founder
Kicking off BCE 2017, Light Reading founder Steve Saunders lays blame for NFV's slow ramp-up and urges telecom to return to old-fashioned standards building and interoperability.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
VeEX at ANGA COM

6|27|17   |     |   (0) comments


At ANGA COM 2017, Cyrille Morelle, president and CEO of VeEX, updates Alan Breznick with VeEX's new products and technology. This includes VeSion cloud-based platform for network monitoring, AT2500-3G advanced spectrum analyzer and MTTplus-900 WiFi Air Expert module. He also comments on DOCSIS 3.1 deployment and Remote PHY technology.
LRTV Custom TV
The Overall Objective Is to Win the Game

6|26|17   |     |   (0) comments


SCTE•ISBE's Chris Bastian discusses Energy 2020's success to date and the importance of a flexible approach that allows for changes in specific strategies in order to reach significant milestones.
LRTV Interviews
CenturyLink: Let's Get Past SD-WAN Hype

6|23|17   |   04:02   |   (0) comments


Technology becomes a "shiny object" unless it's properly focused on solving business needs for enterprise customers, says Bill Grubbs, network solutions architect for CenturyLink. He explains to Light Reading why SD-WAN deployments have to be tailored to specific needs – and more.
Women in Comms Introduction Videos
Infinera's Sales Director Paints Tech's Big Picture

6|21|17   |   4:14   |   (1) comment


Shannon Williams, Infinera's director of sales, shares how she achieves work's many balancing acts -- between her role and the broader company, today and tomorrow's tech and more.
LRTV Custom TV
SD-WAN Innovation & Trends

6|20|17   |     |   (0) comments


Versa CEO Kelly Ahuja discusses with Carol Wilson the current status and trends in the SD-WAN market, Versa's innovation around building a software platform with broad contextualization, and the advantages that startups can bring to the SD-WAN market.
LRTV Interviews
Ovum's Dario Talmesio on 5G in Europe

6|20|17   |   02:16   |   (0) comments


At 5G World 2017, Dario Talmesio, principal analyst and practice leader on Ovum's fixed and mobile telecoms European team, explains the emerging trends amongst European operators as they prepare for 5G.
LRTV Custom TV
Putting Power on a Pedestal

6|19|17   |     |   (0) comments


ARRIS's John Ulm says a major accomplishment of SCTE•ISBE's Energy 2020 program is increased focus on power cost and consumption, including inclusion of energy requirements in operators' RFPs and RFIs.
LRTV Custom TV
Gigabit Access: The Last-Mile Pipe for All Future Services

6|19|17   |     |   (0) comments


A Gigabit access platform being deployed today must be able to deliver all types of services to an increasing number of devices. A non-blocking architecture is necessary to support the ever-increasing growth in bandwidth demand. The Huawei Gigabit access solution is based on a distributed design that is fully scalable to deliver a unprecedented performance.
LRTV Custom TV
Key Factors to Successfully Deploy an SD-WAN Service

6|19|17   |     |   (0) comments


As service providers transition their SD-WAN solution from trials and limited deployments into production at large scale, there are important considerations to successfully operationalize these solutions and realize their full potential, without adding complexity, introducing uncertainty or disrupting current business operations. Sunil Khandekar, CEO and Founder ...
LRTV Custom TV
IoT Solutions: Rational Exuberance

6|19|17   |     |   (0) comments


IoT solutions are morphing from hype into viable business opportunities. Huawei has the platform and ecosystem support to help carriers successfully address new business opportunities in the IoT space.
LRTV Custom TV
Realizing ICN as a Network Slice for Mobile Data Distribution

6|19|17   |     |   (1) comment


Network slicing in 5G allows the potential introduction of new network architectures such as Information-centric Networks (ICN) as a slice, managed over a shared pool of compute, storage and bandwidth resource. Services over an ICN slice can benefit from many architectural features such as Name Based Networking, Security, Multicasting, Multi-homing, Mobility, ...
LRTV Interviews
Ovum's Mike Roberts on 5G Uptake

6|19|17   |   04:08   |   (0) comments


Mike Roberts, research director for Ovum's service provider markets group, explains why he has boosted his 5G subscriptions forecast.
Upcoming Live Events
October 18, 2017, Colorado Convention Center - Denver, CO
November 1, 2017, The Montcalm Marble Arch
November 1, 2017, The Montcalm Marble Arch
November 30, 2017, The Westin Times Square
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
No Imagination: UK Chip Biz Goes Up for Sale
Iain Morris, News Editor, 6/22/2017
Does AT&T Deserve Time Warner?
Mari Silbey, Senior Editor, Cable/Video, 6/23/2017
Netflix's Lesson in Culture Expectation Settings
Sarah Thomas, Director, Women in Comms, 6/21/2017
Kalanick Steps Down as Uber CEO
Sarah Thomas, Director, Women in Comms, 6/21/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Following a recent board meeting, the New IP Agency (NIA) has a new strategy to help accelerate the adoption of NFV capabilities, explains the Agency's Founder and Secretary, Steve Saunders.
One of the nice bits of my job (other than the teeny tiny salary, obviously) is that I get to pick and choose who I interview for this slot on the Light Reading home ...
Animals with Phones
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.