China Mobile taps Huawei in GSM net expansion
China Mobile, the country's largest mobile operator, has awarded a US$700 million contract to Shenzhen-based Huawei Technologies to expand its GSM mobile network, according to Huawei.
The contract represented 23.6 per cent of China Mobile's planned spending on expanding its GSM capacity group purchase project this year, Huawei said in a press statement yesterday.
This comes as mainland mobile phone operators are pouring money into expanding their networks to meet robust demand from users, as callers increasingly eschew fixed lines for cell phones.
Huawei said it would expand China Mobile's GSM network coverage in 30 mainland provinces, deploying thousands of GSM core and radio products including a new generation of base stations that support both 2G and 3G platforms.
China Mobile last month opened the tender for its 35 billion yuan GSM network expansion project for this year, an industry source said. He said Huawei and ZTE won more than 25 per cent of the contracts and foreign vendors such as Ericsson and Nokia accounted for more than 50 per cent. The mobile operator announced in March that it had budgeted 99 billion yuan for this year's capital expenditure which does not include the funds to be used on the proposed 3G network.
In the press statement, Huawei said the US$700 million contract was the second largest awarded by China Mobile but did not say who won the largest or how much it cost.
China Mobile is upgrading its GSM network into one that is wholly based on internet protocol which is compatible to 3G service.
The mainland is expected to issue three 3G licences, including one to China Mobile, in time to make the service available during the Beijing Olympic Games next year. No timetable has yet been announced.
China Mobile has added 25 million new users since the beginning of this year. Analysts believe that the company needs to expand the network capacity to meet the demand and keep the quality of its network.
Smaller rival China Unicom also announced earlier this week that it had selected Swedish firm Ericsson as the supplier to upgrade its GSM network into 2.5G or GPRS-compatible network in six provinces.