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    ENGLISH EDITION OF THE WEEKLY CHINESE NEWSPAPER, IN-DEPTH AND INDEPENDENT
    site: HOME > > Economic > News > Corporation
    Huawei: GSM's Dark Horse
    Summary:Array

    China Mobile has spent almost 35 billion yuan on its GSM network expansion this year. Among those suppliers involved in the purchases, Ericsson received the largest share at 26.5 percent, followed by Huawei with 3 percent less. Nokia Siemens made 19.7 percent of the sales.

    Details on the Tendering Process

    China Mobiles purchase of GSM equipment began late last year. By January 2007, all technical evaluation and grading had been finished, and from February to March, quotations were completed. By the end of that period, requirements from provincial branches of China Mobile had been collected for market share reference. In the first ten-day of April, all contracts were signed.

    With a 7.7 billion yuan contract, Ericsson will provide network expansion and uprading for 19 provinces, including Guangdong, Shandong, and Jiangsu.

    Huawei emerged as a dark horse. Its EnerG GSM BSS equipments will be largely deployed in some coastline provinces and areas including Guangdong, Jiangsu, Zhejiang, and Shandong.

    Many have been surprised at the recent shrink in GSM industry market share for certain multinational suppliers, including Nortel and Motorola.

    Ebb and Flow of the GSM Industry

    Having lowered costs to improve competitiveness, Huawei poised itself for success in the auction. In terms of high-quality, mature GSM equipment, Huawei ranks with yesterdays suppliers from Europe and the US. Additionally, certain key 3G technologies developed by Huawei are being introduced into its 2G equipment in order to provide better coverage and smooth technology transition capability.

    Says one senior vice-president of Huawei, "Nearly everyone in the industry believed that GSM would be replaced by 3G five years ago, and all were welcoming the 3G era. What resulted was that many GSM suppliers merged their R&D of 3G and 2G to reduce GSM investment. This had other consequences... Huawei chose a different route.”He says that Huawei focused on creating a unified industry and market based on GSM/WCDMA, and researching and developing a unified 2G/3G mobile softswitch that was based on R4 infrastructure. This set Huawei's leadership on choosing R4 softswitch over IP-based technology. 3G technology introduced into 2G equipment design greatly improves GSM network performance and quality.

    Zhang Yu, an analyst for BDA, believes that an increase of 2G market share would boost Huawei's bargaining ability in the 3G domain. This would come as competition weakens.


    "Ericsson appears calm, but its share of the infrastructure market is continuously shrinking," says Shi Wei, a director of the Institute of Economy System and Management of China National Development and Reform Commission.

    An report entitled "The Development of Telecom Software" will be finished before the end of this year by the National Development and Reform Commission, in partnership with the China Academy of Telecommunications Research. It is expected that in the report, R&D in mobile communication software will be listed as one of important sectors where the Chinese information industry can be developed during the 11th five-year plan.

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