Huawei Builds Euro Backbone

Huawei Technologies Co. Ltd. has struck again in Europe, this time with an unnamed carrier that has extended its network to 14 points of presence (POPs) in burgeoning central Europe.

The Chinese vendor has already had some foot-in-the-door success with operators in Western Europe, such as BT Group plc (NYSE: BTY; London: BTA) and Fibernet Group plc (London: FIB). And it claims to have equipment in use by all the major incumbent national operators in the region (see Huawei Gets BT's Blessing and Huawei Springs Surprises).

Now a source involved with this latest network says Huawei is the sole supplier of core switches for a 14-POP network expansion covering at least Austria, Germany, the Czech Republic, and Slovakia. The construction was completed by German integrator Vierling, which says the network is already live, and that the main POPS are in Frankfurt, Munich, Prague, Bratislava, and Vienna.

The identity of the carrier, though, has not been revealed, and Huawei declines outright to talk about the project.

Nick McMenemy, head of strategy and business-critical operations at pan-European operator Interoute Telecommunications, says his company isn't the buyer. He's been crawling over network assets and ongoing operations in that part of the world recently looking for network assets to buy on the cheap, a practice that has become commonplace in Europe (see Cogent Adds to Euro Empire, Linx Links the Baltics, and Interoute Acquires Ebone).

McMenemy says Interoute is only expanding through acquisitions, rather than new network expansion, as there are plenty of assets available to buy, it's cheaper, and it's a quicker way to get up and running in a new market.

McMenemy's comments, though, imply that whoever the carrier is, it is likely running a healthy business to be able to afford outright expansion. "It only makes sense to build out if you know you'll have revenues greater than the cost of building and running the network -- you have to make a profit," he says. "The days of build-and-they-will-come are over, thank goodness. It's about building to demand these days."

— Ray Le Maistre, International Editor, Boardwatch

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truelight 12/5/2012 | 2:05:57 AM
re: Huawei Builds Euro Backbone optoslob = Huawei employee of the month.
optoslob 12/5/2012 | 2:05:58 AM
re: Huawei Builds Euro Backbone Vlady, sorry to hear that your experience working for Huawei was so negative. I have never been an employee of Huawei only a component supplier, a US component supplier. As a supplier I want to be associated with a company that is growing and interested in new and cheaper ways to do produce a given piece of equipment. Huawei is making huge market share gains in DSL (cost per port) and in the costs of enterprise network systems. They are gaining respect world wide and have the right cost model to be attractive in todays telecom market.

truelight 12/5/2012 | 2:06:00 AM
re: Huawei Builds Euro Backbone EOM

They are without doubt a threat to the western eco system in communications netwroks. CISCO will try fight them but it's difficult to stop a company that does not obey international copyright and IP laws !

If any customers are reading this email thread please make sure you are public about using them in your network.

st0 12/5/2012 | 2:06:01 AM
re: Huawei Builds Euro Backbone dado,
you miss the point.... cooperative research and development between the company (such as state run Airbus) is much efficient than competition.... particularly, compare with the HIGH OVERHEAD competition (everything is measured, re-checked, cost cutted, bean counted to get the last bit out of the it....) The OVERHEAD usually ignored when you calculated efficiency and burried some places required SEC to digged out (how many companies have to re-statement of earning?). WCOM story come into mind...fake competition that doomed many company...artificial number exist because the money were spent in the OVERHEAD, not the real R&D (very difficult to fake the R&D, can't demo or GR qual a fake, can you?).

dadofamunky 12/5/2012 | 2:06:01 AM
re: Huawei Builds Euro Backbone 1) There may be some correlation.

2) That is VERY interesting. Huawei having a collectivist culture? That has significance for me, let me tell you. Also interesting that their average salaries are so high. Is this is a coincidence, given that the Chinese military gets first call on all resources from the state? Just wondering.

3) Also correct that Huawei is definitely on the move. And interesting that both you and your wife have a view into their system.

4) If what you say is true, then there is a logical connection, and of course countries should be free to support their own enterprises within reason. However, I still doubt that things are precisely as you state; there are persistent rumours of Huawei's deep connections to the Chinese military.

A good e-mail, as opposed to the agitprop of some others.
shen 12/5/2012 | 2:06:02 AM
re: Huawei Builds Euro Backbone Don't you think this is the same line perhaps being said some 40 years ago on Japanese auto or home electronics manufacturers: low quality, cheap, me-too products?

As a chinese, I have lived in china for many years. Personally, I don't like Huawei b/c their corporate culture is extremely collectivism. As such, I chose to work in other multinationals such as Nortel and Lucent. But I have to tell you I worked much less harder than many of my university classmates who work in Huawei. And in fact, I made much less than them. On average, my classmates made US$2,500 per month, plus the year-end bonus which were about 1x of their annual base salary. Yes, Cisco engineers made much more in the U.S., but I can say with all confidence that engineers in Huawei, on average, are highest paid among all telecom companies, local or multinationals in china.

Just given you a sense how fast Huawei has expanded globally. My wife is still working in china in a U.S. network management software company. One and a half years ago, Huawei's product managers had to beg my wife's company to include Huawei's gears into their software. Now my wife's company's software sale in BT is at stake if Huawei's equipment still can not be managed.

Just fyi, Huawei is indeed a private company. At one point during the company's starting up, Huawei had hard time to secure the much-needed bank loan to pay for their R&D projects. The reason, you might be surprised, is simply the fact that Huawei is a private company. Banks (they are actually totally backed up by the government, and therefore are doing so poorly) were only allowed to make loans to state-owned enterprises (communism system). Now everything has changed, banks are lining up to make loans to Huawei. Once the government saw the phenomenal growth of Huawei, much higher than its state-owned counterparts (ZTE for example), they started to change their opinions. Now, yes, the government supports Huawei in terms of encouraging Huawei's exportation to other countries. But I see nothing wrong here. Every country has to support its own enterprises. The CDMA network built up in China was purely resulting from the pressure and lobby efforts from the U.S government. The purpose is simply, to put Lucent, Motorola and Qualcomm into the door.

I think the top dogs at cisco are not stupid. They take Huawei very seriously. Facts will eventually speak of themselve.

dadofamunky 12/5/2012 | 2:06:04 AM
re: Huawei Builds Euro Backbone Disagree strongly. They work hard and spend a little not because Huawei has any particular virtue (I submit that it doesn't) but because a) they have very little to SPEND, being paid #@%$ like virtually every worker in China; b) because they WORK FOR A TOTALITARIAN STATE!

Also, just have a LITTLE skepticism, will you? The Soviets had a good term for their technique of presenting a beneficial front while continuing
to crush dissent - Maskirovka. I submit the Chinese government does much the same thing. After all, Huawei is a model enterprise for them. Do any of you really KNOW what goes on there? Despite your visits and claims to having worked there, I submit you don't. There have been rumors in the free press that Huawei is a front for the PRC's military establishment. But it is impossible to ask the powers that be whether or not that is true. Meanwhile, they present a pleasant, accommodating face to the world.

Hello out there! Remember? Has the PRC government ever been legitimately elected? No!

Would YOU want to live under that government? I sure as hell wouldn't!

I wonder how many respondents here are actually e-mailing from mainland China.


well said. if state backed company is the model to follow, why not do so now? why it still beat each other up like gladiator? (Roman ruin is scary thought)....

too much money being spent on ads and power point and CEO salary, too little being used for R&D, particularly, The D side....

Visit Huawei ages ago, these guys work hard and spent a little, no Tyco party at all.... that is the difference....

coreghost 12/5/2012 | 2:06:06 AM
re: Huawei Builds Euro Backbone .....So they have ingredients of a good company unlike the blood sucking, unethical , borderline illegal practices of the likes of cisco et.al....I cannot believe that Cisco, Intel et.al. are even brazenly opposing expensing stock options. This is beyond greed and immoral.

The reason they oppose expensing stock options
is that it will force them to limit stock options
to senior executives. I've never seen a company
yet that stopped giving stock options to senior
executives based on expensing rules. Those
people will get whatever they want regardless
of the accounting rules.

Cisco and Intel have both made large numbers of
ordinary engineers and workers rich over the
past decade or more through stock options.
Executives also got rich, but at least (unlike
Huawei) something was given back to the workers.

I guess everyone is supposed to consider
two successful companies who have been very
generous with their workers to be unethical.

Huawei on the other hand has never been known
to be generous with anyone. I've never heard
anyone who worked for them or with them say
a good word about the experience.

edgesansonet 12/5/2012 | 2:06:07 AM
re: Huawei Builds Euro Backbone Wait a minute...
Huawei is one of the highest paying companies in its local cities(Shenzhen, Beijing, Bangalore, Richardson).

That is news to me.
Banglore has an office of Huawei! Duh!
Since when did China outsource to India?
Looks like one those classis algorithmic problems... A outsources to B...B outsources to C...now, C can outsource partly to A and D.. and so on.
What the heck?

AFAIK, there is no difference between the turbanned Taliban and the heebeegeebee Huawei.
Bomb them both.

edgesansonet 12/5/2012 | 2:06:08 AM
re: Huawei Builds Euro Backbone rolostar_maam,
>> Better engineered products at lower price..

Better engineered....do you mean nicely copied?

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