Huawei scored a big symbolic victory over market leader Ericsson by bagging a LTE network deployment contract from Sweden’s Tele2.
“Huawei is contributing high technical competence and cost effectiveness, both are key in our extensive investment in the build out of a nationwide 4G network," said Net4Mobility, which is jointly owned by Tele2 and Norway’s Telenor.
The new network is scheduled to be launched by 2010 and will cover almost whole of Sweden by 2013.
Ericsson has admitted that it could not match Huawei on the price front for the deal. “We went as low in price as we could in the negotiations, but it wasn''t enough," said Ericsson.
Telenor too had recently selected Huawei for complete overhaul of its network in Norway.
Incumbent vendors such as Ericsson, Nokia Siemens Networks and Alcatel-Lucent have been facing tough times due to the forced change in market environment brought about by Chinese firms, Huawei and ZTE. The Chinese firms are not only aggressive on the price, but since last year they have also tied up with Chinese Banks to offer credit facility to operators for equipment purchase. This strategy has turned out to be a kind of saviour for operators who otherwise found it difficult to arrange for funds in a global economic meltdown scenario.
New equipment orders in developed world such as Europe and North America are expected to come from operators gearing up to migrate to LTE ecosystem. Vendors such as Ericsson, NSN and ALU would have been hoping to cash in on this upcoming demand to compensate for drop in revenues on other business fronts. But it appears that the slice of this opportunity is not going to come easily for these vendors.