Huawei set to disrupt North American LTE market

Jessica Scarpati | December 14, 2009

SearchTelecom.com

Long seen as the Wal-Mart of telecom equipment vendors, Huawei Technologies is shedding its reputation for cheap parts and cut-rate engineering and establishing its credibility as a low-cost supplier with premium quality. Although it is landing contracts across Europe, Huawei has yet to score a major deal with any top North American operator. But analysts say that day isn't far off, as the US market becomes a battleground for Long-Term Evolution (LTE) vendors.

"A few years back, [Huawei was] viewed as a technology laggard -- someone who did knockoffs of other vendors. That isn't true anymore, and I don't think people close to the industry share this opinion anymore," said Andrew Schmitt, directing analyst at Infonetics Research. "They are broadly considered to be a technology and financial double threat."

Like all telecom equipment vendors in the market, Huawei is hungry for US next-generation network dollars, as wireless operators on every tier plan their LTE build-outs. Over the past few years, the Chinese supplier has quietly won a handful of 3G and 4G Wimax contracts with smaller North American operators, and it recently announced that it would add 600 employees in North America next year.

But would AT&T, Verizon Wireless, Sprint and T-Mobile go outside their comfort zones and gamble their North American 4G networks on Huawei? Possibly -- but not as their primary LTE vendor, according to market watchers.

"[Operators] are already taking them very seriously, but I don't expect Huawei is going to get a big win from one of the two major North American operators in 2010," said telecom consultant Tom Nolle, president of CIMI Corp.

"I think Huawei will get some wins in North America and probably some product deployments," he added. "Among big American operators, they won't be big wins but it'll be enough wins for operators to build a comfort level. In 2010, we'll start to see momentum in Huawei's direction."

Schmitt agreed that Huawei still has an uphill battle against incumbent LTE vendors in North America, but he said its small yet growing US portfolio will enhance the telecom equipment vendor's credibility.

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