Local vendors lose out again as eMobile signs Huawei

15 Aug 2006

The rollout of Japan's newest W-CDMA nationwide mobile network by eMobile, the new mobile subsidiary of leading DSL wholesaler eAccess Ltd, is gathering pace and causing not a few surprises and disappointments among vendors.
eMobile announced late in July that it had selected Huawei Technologies from 15 global vendors as a second prime network vendor to work alongside Ericsson, which in March was awarded the contract for the nationwide core network and the 1.7-GHz radio network in Tokyo, Osaka and Nagoya.
Huawei will start by deploying networks in Sapporo and Sendai. This is the first contract for Huawei or any Chinese network vendor in Japan, and it means that Japanese vendors have completely lost out on this pioneering 3.5G network business worth $3 billion to $4 billion. 'The choice of Huawei was an extraordinary shock to Japanese vendors,' eMobile and eAccess CEO Dr Sachio Semmoto told Wireless Asia.
Japanese vendors are not the only shocked and disappointed vendors. Lucent Technologies was passed over yet again. One year ago Lucent appeared to be in pole position with eAccess after working on apparently successful trials combining HSDPA and Lucent's IMS. Lucent was presented as eAccess' partner in several high profile PR social and events.
Among the reasons cited for the selection of Huawei by eAccess are its strong product development skills, quality management systems in IP technology and small base stations.
eAccess has done an impressive job of fundraising for the new venture. eMobile now has equity and debt financing totaling 363 billion yen ($3.16 billion). The companies are planning to offer seamless IP-based fixed and mobile services with data services starting in March 2007 and voice services following in Spring 2008.
Putting up a state-of-the-art nationwide mobile network, of course, is costly and eAccess will struggle to reach the 85% coverage required by the government within five years under its present business-financing plan, even though the network will be IP-based.
NTT DoCoMo spent $20 billion on its W-CDMA network and Vodafone Japan around $10 billion on its latest network. From this perspective, it is easy to understand the decision to partner with Huawei, which has risen quickly by combining advanced technology with low prices.
eMobile's ambitious strategy contrasts sharply with IP Mobile, Japan's other mobile start-up, which announced that it has secured just over 4 billion yen to build its network. Non-Japanese vendors have also secured a significant part of the contracts so far awarded by IP Mobile.

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