Telefónica O2 Germany GmbH & Co. OHG will rip out all of its Nortel Networks Ltd. GSM and UMTS base stations and replace them with equipment from Huawei Technologies Co. Ltd. and Nokia Networks , the operator has told Unstrung. (See O2 Germany Picks Huawei.)

The German operator has opted for a new, two-vendor supplier strategy as it upgrades its existing network and builds greenfield sites. And while Nokia has held on to its position as a key vendor partner, Nortel, previously a long-time O2 Germany supplier, has been unseated in favor of Huawei. (See Nokia Cozies Up to O2, Nortel, O2 Demo HSDPA, MMO2 Ups German Investment, and MMO2 Preps for HSDPA.)

"All Nortel base stations will be replaced," says an O2 Germany spokesman.

Most of the base stations Nortel supplied to O2 Germany were GSM, while the vendor's UMTS equipment was only "a small minority in our network," according to the spokesman. (See Nortel Wins Expansion Deals and O2 Can Do UMTS.)

The deal with Huawei calls for 8,000 GSM and UMTS base stations to be deployed in the south of Germany, while Nokia Siemens will provide infrastructure for the north of Germany.

O2's goal is to reach 100 percent GSM coverage in the country by the end of 2009 so that it can end a national roaming agreement with T-Mobile, on which it still relies to reach about 10 percent of the German population.

At the same time, O2 Germany plans to boost its UMTS network to 60 percent coverage.

This is the second time Nortel has lost out to, and been replaced by, Huawei in Germany recently: Late last year T-Mobile International AG opted to deploy the Chinese vendor's Packet Switched Core Networks infrastructure elements in a number of key European markets. (See Huawei's Core Euro Breakthrough, Huawei Wins T-Mobile Deal, The Huawei Equation, and Huawei Sets Bumper Sales Target, and Heavy Reading Homes In on Huawei.)

Huawei has been hoovering up key European mobile operator accounts lately, bagging contracts at Telecom Italia Mobile SpA (Milan: TIM) and Vodafone Group plc (NYSE: VOD). (See Huawei Wins at TIM, Vodafone Selects Huawei, V'fone Czechs Out Huawei, and Huawei Joins 3G Board.)

— Michelle Donegan, European Editor, Unstrung