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Chinese firm beats Ericsson to 4G deal

TT/The Local · 18 Dec 2009, 13:12

Published: 18 Dec 2009 13:12 GMT+01:00

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Telecom operators Telenor and Tele2's joint venture Net4mobility has selected Huawei to roll out its new high speed network. Both Tele2 and Telenor said they were won over by Huawei's competitive prices.

"It has been a long procurement process in which we discussed both technology and price before settling on Huawei," Tele 2 Sweden CEO Niclas Palmstierna told the TT news agency.

"All actors in this process are strong on technology and have comparable offers. But we opted for Huawei because they met with all of our important parameters," he added.

Net4mobility aims for its high speed 4G mobile network to be available to 99 percent of the population by 2013, with work on the project set to start next year in the major Swedish cities.

Ericsson said it regretted the decision not going its way.

Story continues below…

"We went as low as we possibly could in price during the negotiations but it wasn't enough," said Mikael Bäckström, head of Ericsson in the Nordic and Baltic regions, in a statement.

TT/The Local (news@thelocal.se)

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Your comments about this article

14:19 December 18, 2009 by krigeren
SE has fumbled so much especially with their software side. Sony and Ericsson have both pumped a great deal in effort into SE and all that they have come up with is a second rate copy of the Iphone application platform "Play Now Arena". This company has to grow up and appeal to adults...the kids are playing elsewhere.
14:35 December 18, 2009 by this_aint_sparta
@krigeren Whats the correlation between your text and Ericsson's LTE ????
15:25 December 18, 2009 by Michael84
This days i see "made in China" every where. =/
22:38 December 18, 2009 by arslan11
@krigeren... Even a stupid looks wise if he keeps his mouth shut...... what is link of Sony Ericsson mobiles with Ericsson Mobile Switching Centre (MSC) and Transceiver equipment???
10:33 December 19, 2009 by daily_reader
well i think Huawei has made deep inroads into the Swedish company's home turf, this shows in future they are going to give tough time to other big names as well in the European market. One more thing which can be anticipated that Huawei is not less than anyone else in Quality, (as people think they opt for quantity i.e. cheapness all the time).

so i think its a big achievement for Huawei.
12:50 December 19, 2009 by coolguy09
Well the quality comes with the price the MTBF of Huawei switch is 10% more than ericsson switch when you compare 3G equipments, I donno if huawei has improved its products for 4G. I keep my fingers crossed to see the QoS .

If it succeeds then Huawei will be the preferred choice for 4G elsewhere in world.
12:56 December 19, 2009 by arnuxii
It's just a capitalist country (China) out competing a socialist country (Sweden) as usual.
13:42 December 19, 2009 by krigeren
@this_aint_sparta @arslan11

Why are you asking me these questions you should be directing them to these morons........

Monica Bergström, Peter Bonfield, Kristina Davidsson, Börje Ekholm, Anna Guldstrand, Jan Hedlund, Katherine Hudson, Ulf Johansson, Per Lindh, Sverker Martin-Löf, Nancy McKinstry, Torbjörn Nyman, Anders Nyrén, Carl-Henric Svanberg, Michael Treschow and Marcus Wallenberg.

But since you took the bait I am happy to reply.

The original intentions of the SE deal was to act as a door opener for Ericsson in the network distribution market among other things.......the grand plan has failed....what next? I think I know but since you guys think you are so smart please tell me..........
16:06 December 19, 2009 by Qinx
@krigeren: I don't know what any of those people do, but SonyEricsson makes phones, Ericsson makes telephony networks. Except for the name, the companies have almost no links to each other. So I'm not sure what "the" deal is you are talking about: SonyEricsson has nothing to do with the 4G deal that this article is talking about.

The problem that Huawei is facing is that they now have to open offices in expensive countries just for their support network, so their personnel cost will probably skyrocket in a few years (if not already in 2010). And salaries in China are shooting up as well as employees run to a competitor for just a few bucks more.

I have seen a report where efficiency between companies was compared. For every R&D employee Ericsson has, Huawei has (and needs!) 3 employees, just to get the same job done. This works as long as Chinese salaries are more than 3 times as low, but as we have seen in India: this won't be the case for much longer.

It's just a case of hoping that Western telephony companies can sit it out and are still around when Huawei has to admit that they're just as expensive as Western companies. Unfortunately, they - or at least Ericsson - now choose to dump it's qualified and very knowledgeable personnel over here, and hire new people with no product knowledge whatsoever in low cost countries. By the time they're up to speed, they will no longer be low-cost, I'm sure.
02:26 December 20, 2009 by Localer
the Huawei employees in Kista were paid the same salaries as they were paid in China, and Huawei provided them free lunch, dinner and accommodations. Every employees will stay for 6 months, and after 6 months, new batch of engineers will replaces them from China...and this rotation goes on.....

they have very strict working hours, and no internet access for the employees, no external or whatsoever drive or disk can be brought into the Huawei office.
08:48 December 21, 2009 by rio

I agree with the most staffs you write, except that Huawei has (and needs!) 3 employees, just to get the same job done...

I guess the situation is the opposite, at least in the R&D area.
10:27 December 21, 2009 by iwissam

Ericsson is one company, SonyEricsson is another.

If SonyEricsson goes bankrupt, Ericsson will still be making 4G deals around the world.

Ericsson is still leading in both LTE and IMS. But worries are rising since more and more deals might be lost in the future.

By the way last year Ericsson made a huge profit on 3G and GSM deals in mainland China. It's business, this doesn't mean the company is going down, neither it does mean that it's going up. Simply a competition where Ericsson AB is still leading (so far).

13:49 December 21, 2009 by linuxcity
If you know how many employee used to die in Huawei because of the work pressure, you will not be so surprised that they got the contract.
11:32 December 22, 2009 by Luckystrike
People must also take into account that YES, Huawei new system sales are cheaper than Ericsson BUT Huawei upgrades/Expansions and maintenance costs are astronomical. So Huawei will appeal to a customer as the cheaper company to do business with but I think Tele2 and Telenor will pay for this in the near future when the technology starts to improve and evolve.

Ericsson on the other hand charge more for new sales systems and much less for upgrades/expansions than Huawei, which when you account for that technology is rapidly growing daily, and the amount of upgrades for 4G/3G even 2G systems still happen up to three times a year....bleh...im rambling on..

Moral of the story. Huawei is cheaper, Short term. I guess you could compare it to a crack addict. Give him a cheap score and once the addict is hooked, raise the prices. Ericsson is much cheaper in the long run and I believe have much better quality, although they have lots of improvements to make.

To those referring to SonyEricsson, I have NO idea why this venture still exists..Crap phones, bad management, a total waste of money. Just dont get the two companies confused with eachother.
06:05 December 27, 2009 by zhqwang
I am chinese,I tell the difference between E and Huawei. E is very modern and strong company,but Huawei is very good company. The improvement speed of Huawei is very quick. Good luck E,and Huawei. I admire E, but I also my Huawei!
01:14 January 14, 2010 by ashfaq.adeel
Well guys with all the comments above i would like to share my experiences... i had been working with Huawei (pakistan) for GSM project rollout for almost 1.5 years in operations department and came here in sweden for higher studies..

>some things which i notced in the company was Management is not good in the sense that they make people work like machines

>The officials could understand the local problems coming in project roll out ...almost till the middle of the project

>They didnt hired enough higly paid professionals .. hence made alot of mistakes in implementation of network and increasing the rollout costs... (by reinstalling equipment again)

> There was not enough reseach made about the project by the huawei officals hence they faced alot of problems.. and the operator too ..

>The company which used huawei had been using Nortel as vendor... before...which had made the quality and made their sales high....but after the installation of huawei euipment the Qos was ruined..

>Its like even now if we have to make a call in pakistan using that operator its like 4 or 5 times of redialing (even after huawei expanded and doubled the network capacity)

> Hence in my opinion they have taken the project of 4G for telenor.. but i am 100% sure that they have made no proper feasibilty report..and will face many problems...even wil the operators....

> For the people being employed in huawei ...well hope so huawei understands how the employes should be treated.
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