Huawei attacks the European market

Huawei Technologies, the China telecommunications equipment maker, is to step up sales efforts in Europe in a move that will raise pressure on western rivals.

Zhou Ming Cheng, Huawei's European marketing director, told the Financial Times the group had achieved sales of $2bn (£1bn) in Europe in 2007, up from $770m in 2006.

Mr Zhou said Huawei aimed to lift European sales this year, implying it was seeking to raise market share at the expense of rivals Alcatel-Lucent, Ericsson and Nokia Siemens Networks.

Huawei's aggressive overseas drive is putting pressure on Alcatel-Lucent and Nokia Siemens, which reported losses last year, and Ericsson, which saw net income fall.

"I do believe that in the coming few years we are still growing very fast here," Mr Zhou said.

"The European market is one of the biggest in the world - very strategic to the company. So we put more investment in and we believe we will have a better and better position here."

He claimed that the 2006 merger between Alcatel and Lucent and the joint venture between Nokia and Siemens had given Huawei sales opportunities because fixed-line phone and mobile operators did not want to be dependent on a restricted range of equipment suppliers.

During the past two years, Huawei has been winning wireless infrastructure contracts with European mobile operators by edging out Alcatel-Lucent, Eric-sson and Nokia Siemens.

Vincent Rech, an analyst at Société Générale, pointed to contracts won by Huawei in 2007 with Vodafone in Greece, Romania and Spain; France Telecom in Belgium and France; and Telefónica in Germany. The contracts underline how Huawei is moving beyond China and other emerging markets.

But while it is enjoying growing success in Europe, Huawei has made limited progress in the US. Mr Zhou said sales of $100m were achieved in the US in 2007.

The 2007 annual report of Huawei, which is not a public company, said it generated revenue of $12.6bn and net income of $673.5m.

Mr Zhou played down suggestions by rivals that it was aggressive in its pricing of contracts so as to win orders.

He described Huawei as a private company and denied it received financial support from the Chinese government.

Ericsson boost its deals in China

Wireless infrastructure specialist Ericsson has won two major deals with the Chinese operators China Mobile and China Unicom in total worth nearly $1.5 bn to the Swedish group.

Separately, Ericsson has also signed a GSM expansion framework agreement with China Mobile valued at $1.3 bn and another with China Unicom valued at around $140 million. The expansion projects are set to be completed in 2008.

Together, China Mobile and China Unicom provide mobile services to about 550 million subscribers. The expansion projects will allow both operators to boost their network capacity and performance.

Under the framework deal with China Mobile, Ericsson will be one of the main suppliers of core and radio network equipment, along with related technical support and services, to expand GSM/GPRS coverage and capacity in 19 regions across China.

Suppliers are still waiting for China to sign 3G license agreements with the country's major operators, and have been for over three years.

Earlier this month, the country moved a step closer to commercializing its home grown 3G technology, with the revelation that the country's leading operator is to trial TD-SCDMA services.