It is believed that the network contracts for Huawei and NSN include 2G, 3G and Long Term Evolution (LTE) equipment. And an industry source suggests that NSN will replace equipment from Ericsson AB (Nasdaq: ERIC) as a result of the deal.
The announcement of the contract award was released here in Polish.
The radio access network (RAN) sharing joint venture company – called NetWorks! -- was established in July 2011 by PTK Centertel, which operates the Orange brand in Poland, and Polska Telefonia Cyfrowa Sp. z.o.o. (PTC) , which operates the T-Mobile brand in the country. They are the first and third operators in the market, respectively, by subscribers, and each operator owns 50 percent of the joint venture. (See Polish Operators Share Networks.)
According to Pyramid Research 's latest Country Intelligence Report on Poland, the NetWorks! joint venture will plan and manage the networks of both operators and is expected to achieve RAN cost savings of 29 percent on a longer-term basis, primarily due to a reduction in the total number base station sites. As Pyramid notes, Orange has about 6,400 cell sites and T-Mobile has around 7,000 sites, and the plan for the shared network is to have 10,000 cell sites.
The network sharing joint venture in Poland is similar to the EE venture that Orange and T-Mobile established in the U.K. (See Orange, T-Mobile Do Everything Everywhere .)
Why this matters
Operator consolidation, whether it's through M&A or network sharing, inevitably creates turbulence for equipment suppliers. But this contract award reduces some of that uncertainty for Huawei and NSN in the Polish market, at least.
For Huawei, this is the second win at a joint T-Mobile and Orange operation, which is significant in itself. The vendor replaced Ericsson, NSN, and Nortel for GSM equipment at Everything Everywhere in the U.K. And with T-Mobile and Orange's parents, Deutsche Telekom AG (NYSE: DT) and Orange (NYSE: FTE), working on consolidating their vendor relationships across their combined footprint, the contracts Huawei has won in the U.K. and Poland give the Chinese vendor an important foothold in the joint businesses of these large European operators. (See Huawei's Trojan Horse , Huawei Lands First UK Mobile Deal and Euronews: Huawei Breaks New British Ground.) For more
Here's what Orange and T-Mobile have been up to lately:
- DT & FT Deepen Ties
- FT, DT Form Procurement JV
- T-Mobile, Orange Join Forces in UK
- EC Clears Orange, T-Mobile UK Merger
- T-Mob, Orange Complete UK Merger
— Michelle Donegan, European Editor, Light Reading Mobile