In a move that will be closely watched across Europe, Norway's Telenor has given its incumbent infrastructure providers, Ericsson and NSN, a bloody nose by selecting Huawei to construct its 4G network.
The deal, valued at around €170 million over the next six years, is the largest LTE in Europe to date and calls for Telenor's existing Ericsson and NSN network equipment to be merged into the new infrastructure provided by Huawei. The contract will see the delivery of equipment across technology generations and frequency bands, as well as base stations for 2G, 3G/UMTS and 4G/LTE. The change of providers will also entail digitisation, with the entire wireless network and core network being migrated to an IP-based platform supplied by Starent Networks, which was acquired by Cisco Systems last month in a US$2.9 billion deal.
Commenting on the contract award, Ragnar Kaarhus, head of Telenor Norway, said that it would involve the biggest upgrade of the mobile network in Norway that has ever been carried out. He attributed the choice of Huawei to "a combination of technical quality, reliability ... and commercial terms"--which some might speculate as Huawei pricing the offer to win.
Market analysts said that the three per cent fall in Ericsson's share price last week was in part attributable to the contract loss, although the significance was more symbolic than material for the Swedish company.
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