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May 9, 2011
Huawei Technologies Co. Ltd. has broken into the mobile equipment market in the U.K. by winning a contract with the country's largest operator, EE .
Bloomberg reported news of the deal over the weekend and it was verified early Monday by a Light Reading Mobile industry source. The operator made the news official late Monday morning, though financial details were not announced. (See Everything Everywhere Picks Huawei.)
The deal is the Chinese vendor's first major mobile infrastructure supply contract in the U.K.
Huawei has been stepping up its presence in the U.K. recently. The company said it plans to add 500 new jobs in the country during the next three years and generate between 1,000 and 1,500 subcontracting roles during the same period. (See Huawei to Hire 500 in UK.)
And at the end of last year, the company opened a new "Cyber Security Evaluation Center" in Banbury. (See Huawei Opens UK Security Evaluation Center.)
Everything Everywhere, the U.K. joint venture between Deutsche Telekom AG (NYSE: DT) and Orange (NYSE: FTE), is consolidating the two operators' 2G and 3G networks. As part of the network integration project, the company has undertaken a wide-ranging vendor review to streamline its equipment suppliers and renegotiate its managed services contracts, which will contribute to its target of saving £466 million (US$763 million) in operating costs annually by 2014 and to cut £200 million ($327 million) from its capital expenditure budget over a five-year period. (See UK Giant Eyes LTE in Vendor Review , UK Mobile Giant Flexes Its Muscle and Orange, T-Mobile Do Everything Everywhere .)
Why this matters
Huawei has landed some key mobile accounts in Western Europe, but this will be the first time that the vendor has won an equipment supply deal with a mobile operator in the U.K.
And this particular customer is important because it could be a stepping stone to bigger deals in Europe. The two European giants behind Everything Everywhere have just joined forces on a larger scale through a procurement joint venture, part of which will include combined efforts on network equipment supply contracts. So, Everything Everywhere's vendor selections could be a model for the rest of Deutsche Telekom and France Telecom's combined footprint, at least for their mobile operations. (See DT & FT Deepen Ties and FT, DT Form Procurement JV.)
The vendors most likely to be licking their wounds later today are incumbent suppliers Ericsson AB (Nasdaq: ERIC) and Nokia Networks .
Huawei's already a major force in Europe:
Huawei Profits Climb 30% in 2010
Huawei Sets Lawyers on ZTE
Portugal Telecom Trials 10G GPON With Huawei
Option Drops Complaints Against Huawei
Telefónica to Go Global With Huawei SDP
Ericsson, Huawei Land Vodafone LTE Gig
— Michelle Donegan, European Editor, Light Reading Mobile
Michelle Donegan is an independent technology writer who has covered the communications industry for the last 20 years on both sides of the Pond. Her career began in Chicago in 1993 when Telephony magazine launched an international title, aptly named Global Telephony. Since then, she has upped sticks (as they say) to the UK and has written for various publications including Communications Week International, Total Telecom and, most recently, Light Reading.
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