Last week we learned that Huawei is reportedly bidding for a significant wireless contract with Sprint Nextel (NYSE:S), according to a report in the Financial Times.
The report, citing unnamed sources familiar with the matter, said Huawei is looking to sell equipment needed for an expansion of Sprint's mobile broadband network. The report did not say what kind of equipment was under discussion, nor did it say if, or when, a decision regarding the contract would be made.
Obviously such an expansion would not be WiMAX-related as Sprint resells the service from Clearwire (NASDAQ:CLWR), which already counts Huawei as a customer. And it's highly unlikely that Sprint issued a contract for CDMA EV-DO Rev. A or B. A Sprint spokeswoman recently told FierceWireless that the operator is not prepping a move to Rev. B.
But back in May, Sprint indicated it issued an RFP for its next-generation technology plans and said LTE is one option. During the LTE World Summit in Amsterdam, Kevin Packingham, senior vice president of product and technology development with Sprint, said the company is evaluating various technologies and is deciding how to evolve its CDMA network, which currently operates in the company's 1900 MHz spectrum.
So my guess is that Huawei is bidding on a possible Sprint LTE contract, which might not conflict with Sprint's Clearwire-powered WiMAX push since Clearwire most likely will deploy LTE sometime down the road.
For Huawei, a deal with Sprint may represent one of the last chances the vendor has to significantly crack the U.S. market. (It is reportedly in the running for Harbinger's planned LTE network.) The vendor, which is planning to increase its presence in North America this year by adding 600 jobs, has deals with Cox Communications, Clearwire and Leap Wireless (NASDAQ:LEAP), but not with a top-tier U.S. operator. AT&T (NYSE:T) and Verizon (NYSE:VZ) have each separately already chosen Ericsson (NASDAQ:ERIC) and Alcatel-Lucent (NYSE:ALU) as their respective LTE vendors.
Meanwhile, Huawei has been blazing a trail across Europe, stealing away major LTE contracts from vendors like Ericsson, Alcatel-Lucent and Nokia Siemens Networks. For CDMA operators, Huawei offers a base station portfolio that supports dual-mode operation for CDMA + LTE. The vendor's value proposition in Europe has been its SingleRAN platform and its unified packet core that collapses 2G, 3G and LTE networks to provide a value proposition that involves lowering an operator's total cost of ownership. That's an enticing proposition in a world that will see operators managing three generations of networks. Of course, Huawei is also known for its aggressive pricing and vendor financing practices.
One hurdle that remains has to do with Huawei's purported ties with the Chinese military. Indian regulators already have kept Huawei from winning some large deals in the country; Huawei is reportedly offering Indian governments unprecedented access to information about its structure and ownership, to prove it is not tied with the military or intelligence agencies. However, in Europe, competing vendors' efforts to discredit the private company by questioning its business practices and ties with the Chinese military don't seem to resonate with operators. Norway's Telenor, which awarded Huawei a six-year deal to replace its entire infrastructure, said it studied Huawei's private ownership but in the end decided it wasn't a factor.
Nonetheless, Huawei may need to restructure or otherwise allay security concerns with the U.S. government to win a major deal in the U.S. --Lynnette