Thursday, 02 December 2021

China Mobile snubs Ericsson and Nokia for $1 billion 4G/5G contract

by Harry Baldock, Total Telecom
Tuesday 05 October 21

The contract instead went to China’s domestic vendors, Huawei and ZTE, perhaps suggesting retaliation for Western sanctions on Chinese firms

China Mobile has reportedly awarded a major network contract worth over $1 billion to Huawei and ZTE, notably rejecting bids from European vendors Nokia and Ericsson.  The exact financial details of the deal were not disclosed, but Huawei and ZTE were reported by Chinese media as bidding CNY7…

China Mobile has reportedly awarded a major network contract worth over $1 billion to Huawei and ZTE, notably rejecting bids from European vendors Nokia and Ericsson. 

The exact financial details of the deal were not disclosed, but Huawei and ZTE were reported by Chinese media as bidding CNY7.49 billion and CNY7.46 billion, respectively, which would suggest that they were the only two bidders.

The deal covers the creation of a converged 4G/5G core, as China Mobile continues to rapidly expand its mobile coverage across the Chinese mainland. 

The lack of European players in this contract should not come as too great a surprise, given the ongoing tensions between the West and China over mobile network security and the US's economic sanctions. 

In particular, Sweden banning Huawei and ZTE from taking part in the country’s upcoming 5G rollout caused a considerable political stir, something which Ericsson was quick to play down on account of its vulnerablity in the Chinese market.

In fact, Ericsson’s loss of business in China has gradually become more pronounced in the last few months, with the company notably closing down a research facility in Nanjing, though it will continue to operate its 5G plant there. 

Earlier this year, Ericsson reported greatly reduced revenue as a result of lost business in China, winning just 3% of a joint China Unicom and China Telecom RAN contract, and 10% of a standalone core contract. 

Nokia, meanwhile, missed out on any major Chinese contracts in 2020, only received something of a boost earlier this summer, with Nokia Shanghai Bell being awarded a 10.1% stake in one of three 700MHz tenders from China Mobile. 

 

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