How much you want to bet heads are rolling in Stockholm, now that Chinese telecom equipment manufacturer Huawei scored a second 4G contract win in Ericsson’s turf?
The story hit the wires earlier this morning in Europe: Tele2 of Sweden chose Huawei for its 4G rollout over Ericsson, just a few weeks after Huawei scored the 4G contract for Telenor of Norway. So much for home field advantage, huh?
According to Reuters, Tele2 and Telenor are sharing a joint 4G project to cut costs — all the more reason why their vendor choice isn’t too surprising, since Huawei is gaining credibility as a low-cost, premium quality vendor.
Carriers are expected to spend billions of euros over the coming years on fourth generation LTE (Long Term Evolution) networks to meet surging demand for mobile data traffic and provide services such mobile TV and gaming.
Due to the costs, many are seen opting to share networks adding to competitive pressure among telecoms gear suppliers already feeling the pinch from the economic downturn.
“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,” Net4Mobility, the company jointly owned by Sweden’s Tele2 and Norway’s Telenor, said in a statement on Friday.
The Insider on telecoms.com’s wireless blog points out some whimpering from Ericsson:
Ericsson moved to issue a statement proclaiming its disappointment to have missed out on a deal with local customers. But, the firm said, it just couldn’t compete with the Chinese player on price.
“We are of course disappointed that we did not manage to reach an agreement with Net4Mobility, joint venture by Telenor and Tele2 in Sweden. We would very much liked to have delivered this LTE network in our home market.
In the negotiation process we went as low as we could in terms of price but it was not enough.”
It’s a foreboding sign for long-time top equipment vendors that they cannot compete with Huawei and ZTE on price.
Now, at least in the Nordic region, all eyes are on TeliaSonera, the region’s biggest wireless carrier, which unleashed the world’s first 4G network in Oslo and Stockholm. TeliaSonera tapped Ericsson and Huawei for the first phase, but now that they’ve found their footing, will TeliaSonera dump Ericsson entirely as it continues its 4G buildout?