Telecom equipment maker Huawei Technologies has won a $700 million contract for China Mobile Communications Corp, the company said on Friday.

Under the deal, Huawei will supply equipment to expand China Mobile's GSM (global system for mobile communications) networks in 30 provinces including Guangdong, Zhejiang, Fujian, Jiangsu and Shandong.

The $700 million deal is a boon for Huawei as it copes with continuous delays in the licensing of 3G (third generation) telephony in China.

Huawei is a latecomer to 2G, holding only a small share of a market dominated by foreign companies.

The firm is the top Chinese manufacturer of 3G equipment, but its products are mostly exported overseas as regulators have yet to allow operators to build 3G networks in China.

The deal represents a 23.6 percent share, the second largest, of China Mobile's GSM purchase.

Ericsson signed a $1 billion contract with China Mobile during a State visit by Chinese President Hu Jintao to Sweden, where Ericsson is headquartered. That deal would expand China Mobile's GSM mobile phone networks in 19 provinces, municipalities and autonomous regions in China.

The GSM network expansion is crucial for vendors including Ericsson and Huawei, as operators spend less while they wait for 3G licenses.

Huawei said it expects its shipment of GSM base transceiver stations (BTS) to hit 1 million in 2007, from 300,000 transceivers last year.

A BTS is a major part of the base station subsystem, responsible for handling traffic and signaling between a mobile phone and the cellular network.

Privately held Huawei generated 65.6 billion yuan in revenue last year, with 65 percent from overseas.

It controlled a 21 percent share of the global GSM market last year. Its GSM gear sales have seen a compound annual growth rate of 74.1 percent in the past three years.

(China Daily 06/23/2007 page10) 

(For more biz stories, please visit Industry Updates)