Huawei Doubles Overseas
According to a Huawei spokesman, the value of contracts won outside China in 2005 was $4.8 billion, or nearly 59 percent of total sales. That compares with $2.28 billion in 2004, or 41 percent of the year's total $5.58 billion sales. (See Huawei's Global Sales Hit $5.58B.)
2005 revenues were $5.6 billion, up 46 percent from $3.83 billion the year before, according to Huawei officials. (See Huawei Plans to Triple Euro Business.)
The spokesman notes that more than half of 2005's total sales were made to mobile operators.
And now it looks as if Huawei has a chance to boost its international presence in the mobile space even further, by getting in on the $4 billion-plus worth of GSM infrastructure deals set to be awarded by Indian operator Bharat Sanchar Nigam Ltd. (BSNL) . (See Mega BSNL Contract Looms.) BSNL had considered blacklisting the vendor from future business after it defaulted on a CDMA contract last year. (See BSNL Shuns Huawei.)
After much debate on the issue, and a little prodding from the Indian Prime Minister's Office, BSNL has decided to let Huawei participate in the bidding process after all, Indian media reports say. The government wants BSNL to involve as many vendors as possible to extract the most competitive deal. It's also one less thing for the carrier to worry about as it pulls together the details of such a huge tender -- for which it keeps overshooting its self-imposed deadlines.
Even with the official go-ahead though, Huawei still needs to find a partner that's got production facilities in the country, as the government has made having a local manufacturing presence a prerequisite for doing business with state-owned BSNL and Mahanagar Telephone Nigam Ltd. (MTNL) . Its own attempts to set up manufacturing operations in India have been delayed. (See India Blocks Foreign Telecom Gear.)
Motorola Inc. (NYSE: MOT)'s name has been floated as a potential partner, and Huawei is also in talks with vendors based in India. It's in the first year of a three-year partnership with Himachal Futuristic Communications Ltd. (HFCL) , but that vendor was one of its local partners in the CDMA spat and Huawei may not be keen on teaming up with it on this particular bid.
To judge from notes to their clients, Lehman Brothers analysts believe Huawei will get a "small allocation" of the contract, with the lion's share going to Ericsson AB (Nasdaq: ERIC), Nokia Corp. (NYSE: NOK), and Alcatel (NYSE: ALA; Paris: CGEP:PA). (See Mega BSNL Contract Looms.)
— Nicole Willing, Reporter, and Ray Le Maistre, International News Editor, Light Reading