Huawei loses key Scandinavian LTE deployment deal, NSN benefits

Having won multiple LTE orders in Europe, Huawei has failed to be included in the full scale LTE deployment planned by TeliaSonera--a decision that will hurt the Chinese vendor given it had secured the deal to build an LTE network for TeliaSonera covering Oslo, Norway.

To most observers' surprise, Nokia Siemens Networks (NSN) has been awarded a two-year contract to supply LTE RAN equipment, network management systems and multivendor integration services. Ericsson, which, along with Huawei was successful in winning an LTE contract from TeliaSonera--in Ericsson's case the Swedish capital Stockholm--has been selected as the other main infrastructure vendor to provide common core networks in Sweden, Norway and, at a later date, the Baltic countries.

Even more surprising, Huawei would seem to have lost the deal on price. According to Lars Klasson, CTO at TeliaSonera, the bids were examined at the technical level together with the respective suppliers' schedules for future technological developments. "They showed no crucial difference between them."

"It was purely for underlying commercial reasons that the vendors were selected, with Ericsson and NSN submitting the best bids," said Klasson. However, it is thought that other considerations, such as the estimated costs of operating and maintenance, became important assessment factors for TeliaSonera.

Industry observers believe that Huawei has been able to achieve early success with European LTE deals partly because it can set the price benchmark. John Strand, CEO of Scandinavian-based telecoms consultancy Strand Consult, said, "Huawei probably sold the first part [of the TeliaSonera LTE deal] at an unrealistically low price."

For more on this story:
Rethink Wireless
and Reuters

Related stories:
Huawei sales stumbled in 2009, forecasting near flat revenues for 2010
Vodafone draws Huawei into mobile core R&D lab
Huawei scores in Europe with LTE
Huawei threatens on many fronts

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