Huawei Pumps Up Asian Biz

Huawei Technologies Co. Ltd. has been busy this week, announcing a monster GSM infrastructure deal in China, talking of its slowing sales growth in the Asia/Pacific region, and striking reseller deals with video delivery and OSS specialists.

First, the GSM deal. Huawei has landed a $700 million deal to supply GSM (Global System for Mobile) infrastructure to China Mobile Ltd. (NYSE: CHL), which is expanding its 2G network while it builds a pilot 3G network ahead of the official award of 3G licenses. (See China Mobile 3G Contracts Awarded.)

Huawei says the deal represents 23.6 percent of China Mobile's GSM expansion project spend, giving it the second biggest share. It will expand the carrier's GSM coverage in 30 provinces with equipment that, the vendor says, can be upgraded to support 3G and even 4G without the need to replace the physical elements.

The biggest China Mobile GSM expansion contract has been awarded to Ericsson AB (Nasdaq: ERIC), which landed a $1 billion deal, while Alcatel-Lucent (NYSE: ALU) bagged a $340 million deal. Nokia Networks is also picking up GSM expansion work from the carrier, which reported it had 327 million GSM subscribers at the end of May. (See Ericsson Lands $1B Deal, AlcaLu Wins China Mobile Deal, and Heilongjiang MCC Picks NSN.)

Huawei has also been boasting about its continuing growth in the Asia/Pacific region, which, for Huawei, does not include its home market, China.

The vendor says the value of contracts signed -- that is, the value of purchase orders signed, which differs from revenues received -- in Asia/Pacific in 2006 was $2 billion, up by $710 million, about 55 percent, from $1.29 billion in 2005.

In 2007 Huawei expects that figure to rise again to $2.4 billion, though that would represent a slower rate of year-on-year growth in real and percentage terms: A $400 million increase would represent annual growth of 20 percent.

Huawei said earlier this year the total value of contract sales worldwide in 2006 was $11 billion. By contrast, its actual revenues were on course to be just above $8 billion. (See Huawei Sales Hit $11B and Huawei's Feeling the Pinch.)

Also this week, Huawei announced a partnership with video system specialist Kasenna Inc. The Chinese vendor is supplying Kasenna video server and middleware software to Chongqing Cable for its video on demand (VOD) service, and now plans to pitch the same setup to other cable operators in China and overseas. (See Huawei Selects Kasenna.)

Huawei also announced an alliance with video encoding specialist Optibase Ltd. (Nasdaq: OBAS) and a reseller deal with OSS vendor VPIsystems Inc. (See Huawei Picks Optibase and Huawei Resells VPIsystems OSS.)

— Ray Le Maistre, International News Editor, Light Reading

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