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Huawei Enters Japanese Telecom Equipment Sector
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Chinese top telecom equipment maker Huawei Technologies hopes its entry into the Japanese market will serve as a springboard for expanding its operations in the East Pacific region, a spokesperson said.


"The East Pacific region is very important (to Huawei) where well-established regulations for telecom vendors require the highest standards of technologies and solutions, and thereby give a competitive edge to Huawei," the spokesperson said.


Huawei on Wedneday clinched a deal with Japanese mobile operator eMobile to deploy Japan's first-ever all Internet Protocol (IP)-based radio-access network.


Initially, Huawei will help eMobile deploy the network around the cities of Sendai, Sapporo and Hiroshima. It will then develop a nationwide universal mobile telecommunications system (UMTS) and third generation (3G) mobile broadband network in the following years.


The deal with eMobile, the first for Huawei in Japan, marks a big step in overseas expansion for the Chinese telecom equipment maker.


Japan and South Korea are the earliest adopters of 3G technologies in the East Pacific.


The two countries have the vast majority of the region's 3G subscribers.


"The Japanese market is the most demanding in the world in terms of product quality, and it imposes extremely rigorous requirements on the comprehensive capabilities of vendors," said Ren Zhengfei, chief executive officer of Huawei.


Huawei is one of the most aggressive Chinese companies in overseas expansion. In the first half of last year, its overseas sales hit US$2.47 billion, exceeding domestic turnover.


Huawei's annual sales last year stood at 46.9 billion yuan (US$5.86 billion).


As a latecomer to the global market, Huawei has been focused on developing markets.


But recently, it has gained increasing favour with the world's top telecom operators such as Britain's BT Group Plc and Vodafone, the world's largest mobile carrier by revenue.


The firm has been pre-qualified to bid for projects from Vodafone, the world's largest mobile operator by revenues. In April, Huawei won a deal to provide equipment to Vodafone's operations in the Czech Republic.


Huawei established its Japan Representative Office in 2002 and incorporated a wholly-owned subsidiary in November 2005.


"The current focus of Huawei Japan is on fixed and mobile operators where deregulation is opening the market to increase the challenges and opportunities for non-traditional communication companies," Huawei's spokesperson said.


The spokesperson said the merger of network businesses of Nokia and Siemens will not pose a major threat to Huawei.


"We do not see these recent industry mergers as significantly changing the competitive landscape in Japan. Part of the rationale behind mergers and acquisitions is to broaden the product line, but Huawei already has a very wide range of product lines compared with other vendors," he said.


"Merging doesn't necessarily translate into lower prices, and there can be friction involved in merging products originating from different platforms."


Nokia and Siemens last month announced plans to merge their network equipment businesses, which will create one of the world's largest players in the industry with US$20 billion in annual sales.


Many analysts have speculated the merger could force smaller players such as Nortel Networks, Motorola, Huawei and its domestic rival ZTE Corp to consolidate.


(China Daily July 21, 2006)


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