Huawei Technologies may be in for a windfall Down Under with a deal that could result in the construction of New Zealand's third 3G mobile-phone network.
The Shenzhen-based telecommunications equipment supplier signed an agreement in December with Econet Wireless New Zealand, a subsidiary of South African parent Econet, to pilot a W-CDMA network in Auckland. The project includes construction of 10 cell sites by April with a possible large-scale network rollout by the end of the year.
Terms of the deal were not disclosed, but it was understood to have a value of about NZ$120 million ($631.69 million). If the full network goes ahead, analysts estimate Huawei could stand to pocket up to hundreds of millions more.
The Econet agreement also gives the company a foothold in New Zealand, where it has not had a presence, and could lead to other types of business.
Last month, Huawei reported sales of US$8.2 billion for last year. With more than half of that - US$4.76 billion, up 108 per cent from 2004 - coming from overseas markets, international expansion has become a key strategy for the company, said Huawei Australia managing director Rio Zhang.
'The China [telecoms] market is quite mature. [Capital expenditure] isn't growing very fast compared with global markets,' she said.