Huawei Networks Sunday

Huawei signs HK$859M supply contract with Sunday Communications to design, manufacture, and deliver equipment and services for its 3G rollout

May 14, 2004

3 Min Read

HONG KONG -- SUNDAY Communications Ltd. (SEHK: 0866; NASDAQ: SDAY) today announced that it has finalised the terms of its supply contract and associated financing facilities with Shenzhen-based Huawei Technologies Co. Ltd (Huawei). All terms of the Supply Contract and the related Facility Agreement have been finalised, and SUNDAY operating subsidiary Mandarin Communications Limited (Mandarin) has concluded the details of the Supply Contract and the related Facility Agreement with Huawei Tech. Investment Co., Limited (HTIC), a subsidiary of Huawei incorporated in Hong Kong. This is in accordance with a Heads of Agreement between the two companies announced in December 2003.

"Multimedia services are gaining momentum worldwide and it is time for SUNDAY to proceed with its plans for 3G rollout," said SUNDAY's Group Managing Director Bruce Hicks. "Huawei was chosen through a rigorous selection process that focused on technical capabilities, pricing and financing, in which Huawei outperformed some of the leading international names in mobile telecommunications. As we announced last December, SUNDAY is fully financed for 3G roll out and we are building towards the new multimedia era in Hong Kong based on Huawei's 3G technology. SUNDAY and Huawei will be powerful competitors in the Hong Kong market."

Supply Contract
Under the Supply Contract, Huawei will design, construct, manufacture, sell, supply and deliver equipment and services for the establishment, installation, implementation and commissioning of SUNDAY's 3G network on a turnkey basis.

Huawei will be responsible for:

  • designing, manufacturing, delivering, installing and implementing the equipment and services;

  • fully integrating the existing network with the 3G network;

  • ensuring full interoperability between the existing network and the 3G network;

  • providing maintenance services during agreed warranty periods;

  • ensuring the 3G network and systems perform to agreed minimum performance criteria.

The value of the Supply Contract is HK$859 million, but SUNDAY has considerable flexibility to change specific equipment supplied and services rendered, giving it maximum flexibility to purchase and install the most technologically advanced equipment available. Payment for all equipment and services provided under the Supply Contract will be made by drawing down funds from the Equipment Supply Facility, one of three financial facilities provided under the overall Facility Agreement.

The financing associated with the Supply Contract is provided under a Facility Agreement covering three separate facilities; a HK$859 million 7.5-year Equipment Supply Facility, a 2.5-year HK$500 million General Facility and a 3G Performance Bond Facility.

The Equipment Supply Facility covers the amounts payable under the Supply Contract. The General Facility will be used to replace the previous loan extended by Huawei as announced in December 2003. The 3G Performance Bond Facility will cover the issue of performance bonds to Hong Kong telecommunications regulator OFTA in the years 2004 - 2010 inclusive, as required under the terms of SUNDAY's 3G licence.

The Supply Contract and Facility Agreement are subject to approval by SUNDAY's shareholders.

Backed by A Global Technology Leader
"The Supply Contract provides for the installation, integration and commissioning of our 3G network. It also cements the close relationship between SUNDAY and Huawei, a company with US$3.8 billion in sales in 2003," said Mr. Hicks. "Huawei's 3G technology is amongst the world's best, and Huawei has one of the largest research and development establishments of any network equipment manufacturer in the world, including 3,500 engineers working specifically on 3G projects. SUNDAY and Huawei already co-operate closely in Shenzhen and the effectiveness of this relationship will continue to grow, giving us an efficient channel in developing desirable and competitive 3G services and bringing them to market quickly."

Huawei Technologies Co. Ltd.

Sunday Communications Ltd.

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