Huawei Overtakes AlcaLu – Again!
The folk at Alcatel-Lucent (NYSE: ALU) must be sick of hearing about the rise and rise of Huawei Technologies Co. Ltd. , because the Chinese vendor's success appears to be coming at least partly at the expense of the Paris-based giant. (See Huawei Closes In on Rivals and Huawei Reports 2008 Revenues of $18.3B.)
First, Huawei edged ahead of AlcaLu in the fixed broadband access infrastructure market, and then recently elbowed ahead in the optical infrastructure sector. (See Huawei Swipes Optical Market Share, Huawei Boasts DSL, Softswitch Lead, and Huawei Rivals AlcaLu for DSL Crown.)
Now, according to Dell'Oro Group , the rapid rollout of 3G networks in China has given Huawei's mobile networks business such a boost that it has knocked Alcatel-Lucent into fourth place in the wireless infrastructure market during the first three months of this year.
According to a recent report from the research firm, the overall global market for mobile infrastructure shrank by 9 percent to be worth about $9.4 billion during the first quarter of 2009, and that decline would have been greater if it weren't for the big shipments of WCDMA and CDMA gear to the Chinese carriers, who are set to spend tens of billions of dollars on their initial 3G rollouts during 2009. (See China's 3G Move to Trigger Spending and China Awards 3G Licenses.)
China Unicom Ltd. (NYSE: CHU), for example, today reiterated its intention to spend 38.7 billion Yuan Renminbi (US$5.7 billion) -- more than 35 percent of its total 2009 capital expenditure budget -- on 3G infrastructure this year, plus a further RMB23.7 billion ($3.5 billion) on its GSM infrastructure. The operator launched its 3G services on May 17. (See China Unicom Plans Massive Capex Hike.)
Initial 3G contract awards in China have favored local vendors Huawei and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763), giving each a hefty boost, though their main rivals are also picking up healthy medium-term deals. (See Ericsson, NSN Brace for Chinese Price Wars, AlcaLu's $1.7B China Boost, Motorola Wins China Unicom 3G Contract, and ChinaWatch: Capex Cuts & Contracts.)
According to Dell Oro's data, Huawei, which is strong internationally as well as in its home market, captured 15 percent of the global mobile equipment market during the first quarter, doubling its share compared with a year earlier.
That made it the third biggest player in the market, behind Ericsson AB (Nasdaq: ERIC), which grew its share by 1 percent to 33 percent, and Nokia Networks , which saw its share dip to 21 percent from 24 percent a year ago.
AlcaLu, meanwhile, saw its share eroded to 14 percent from 16 percent a year earlier.
Nortel Networks Ltd. , not surprisingly, took a hit: Its mobile infrastructure market share dipped from 8 percent in the first quarter of 2008 to 4 percent this time around. (See Nortel Stays the Course, Declares Victory and Nortel: Closing Time?)
— Ray Le Maistre, International News Editor, Light Reading