Swedish joint venture of Tele2 and Telenor turns to Chinese vendor for its national LTE rollout, leaving Ericsson to rue a home turf loss

December 18, 2009

2 Min Read
Huawei Beats Ericsson to Swedish LTE Deal

Huawei Technologies Co. Ltd. has landed a significant blow to one of its major infrastructure rivals by winning a nationwide Long Term Evolution (LTE) network deal in Sweden, Ericsson AB (Nasdaq: ERIC)'s home turf.

Net4Mobility, the joint venture announced earlier this year by Tele2 AB (Nasdaq: TLTO) and Telenor Group (Nasdaq: TELN)'s Swedish operations, announced today that Huawei is to supply LTE access network infrastructure and modems for a service that will launch in 2010 and which, the operator hopes, will be available nationwide by the end of 2013. (See Swedish Operators Join Forces in LTE Race.)

The deal does not, however, include Evolved Packet Core (EPC) technology. (See LTE Core Action Heats Up.)

The Swedish contract marks another feather in Huawei's LTE cap, and is likely to have been influenced by the Chinese vendor's close involvement with Telenor's mobile plans in Norway. (See Huawei's Nordic Coup.)

Huawei has gained significant traction with its LTE gear in Europe, where it's involved in the first LTE service launch with Telia Company (as is Ericsson), and is involved in some way with most of the leading carriers. (See TeliaSonera First to Go Live With LTE, O2 UK Trials LTE, Huawei, Telecom Italia Test LTE, T-Mobile Tests Huawei's LTE SON, T-Mobile Reveals LTE Trial With Huawei, and Vodafone Tests LTE With Huawei.)

Ericsson, though, is hinting that low-pricing tactics played a part in Huawei's success.

"We are of course disappointed that we did not manage to reach an agreement with Net4Mobility," states Mikael Bäckström, president of Ericsson Nordic and Baltics, in a statement supplied to Unstrung. "We would have very much liked to have delivered this LTE network in our home market. In the negotiation process we went as low as we could in terms of price but it was not enough."

That doesn't mean the door is completely closed to Ericsson and other LTE access players such as Alcatel-Lucent (NYSE: ALU) and Nokia Networks .

Telenor Sweden spokesman Marcus Adaktusson tells Unstrung that the deal is not exclusive, and that there were three vendors involved in the final round of bidding -- Huawei, Ericsson, and one other unidentified firm.

Adaktusson declined to comment on the level of capex Net4Mobility is committing to its LTE rollout.

— Ray Le Maistre, International News Editor, Light Reading

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