Marconi Hitches a Ride With Huawei
The most immediate gain for Huawei is deeper penetration into one of its main international target markets: Western Europe, where Marconi has many customers in the U.K., Germany, Italy, Spain, Belgium, and other countries. (For examples, see T-Com Selects Marconi , Marconi, Italtel Score at C&W, Marconi Softswitches With BT, Belgacom Upgrades With Marconi, and Telecom Italia Picks Marconi for SDH.)
For Marconi, a greater chance to sell its products into the massive Chinese market is an obvious gain, but Huawei's customer base now includes fixed and wireless operators in many emerging markets, so expanding Marconi's international potential (see Huawei's Global Sales Hit $5.58B, Give Them Credit: Huawei's Growing , and ...and East Looks West).
So what does this meeting of minds actually entail? Marconi spokesman Skip MacAskill says the two firms are still negotiating the details of the agreement, but that Marconi wants to resell Huawei's high-end Quidway routers, while the Chinese vendor is keen to add Marconi's wireless backhaul systems to its product portfolio.
"We have a very high-end router, our BXR 4800, but then we don't have anything between that and our multiservice access and edge products. This deal will give us a product that sits in the space where Cisco plays," says MacAskill (see Marconi Puts Crescent to Work and Marconi Scores $9M Gov't Win).
He adds that, in addition to China, Huawei will open doors for Marconi in the whole of the Asia/Pacific region, Latin America (particularly Brazil), and Eastern Europe, including Russia (see ETel's Expanding With Huawei, Huawei Eyes Euro 3G, and Huawei Builds Out MegaFon).
"We're a mid-sized company now. Strategic partnerships are more important to us now than ever before," says MacAskill.
So what will happen to the agreement forged just last September with Huawei's Chinese rival ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763)? The Marconi man says it's "too early to say whether this new agreement will impact the ZTE relationship. We're trying to drive forward all the partnerships we have."
ZTE couldn't be reached for comment.
The product development part of the equation is also hazy at this point. MacAskill says it's "the least defined area of the agreement at present," though he adds it's likely that security and optical developments will be discussed.
The agreement doesn't mean the two companies won't compete at all, however. MacAskill says the current procurement process for BT Group plc's (NYSE: BT; London: BTA) next-generation 21st Century Network (21CN), where the two companies are shortlisted in the access equipment category, is a "separate issue" (see BT Has 21CN Shortlists).
Huawei says it sees the relationship encompassing all geographic areas and covering a multitude of product types, services, and support. "This is a strategic partnership and will cover anything that can help our carrier customers in a complementary way," says Huawei spokesman Richard Lee.
Huawei already has a partnership with European vendor Siemens Communications Group that covers the enterprise market (see Siemens and Huawei Edge Closer).
— Ray Le Maistre, International News Editor, Light Reading