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Alcatel-Lucent, Nokia, Ericsson win China Mobile 4G contracts

  • China Mobile (CHL +1.1%) has handed out RMB20B ($3.26B) worth of 4G TD-LTE base station supply contracts. 65% of the orders are reportedly going to local vendors - Huawei (25%), ZTE (ZTCOY.PK - 20%), and Datang (10%) are getting large portions - and the rest are going to Alcatel-Lucent (ALU +3.5%), Nokia (NOK +1.7%), and Ericsson (ERIC +1.9%).
  • Alcatel is said to be receiving a 13% share of the orders (worth $424M), and Nokia and Ericsson are each believed to be getting 11% (worth $359M). Evercore previously forecast Western suppliers would receive ~30% of the orders.
  • Altogether, CHL is procuring 207K base stations. The purchases will consume a large chunk of the ~$7B the world's biggest carrier has allocated this year to 4G capex, ahead of the expected arrival of government licenses at year's end.
Comments (9)
  • Seppo Sahrakorpi
    , contributor
    Comments (1972) | Send Message
    Good: NSN got some share of the pie.


    Bad: NSN did not get the whole deal, as it should have, as per earlier reports it had the cheapest offer on the table...
    22 Aug 2013, 11:49 AM Reply Like
  • TheMasterPlan
    , contributor
    Comments (99) | Send Message
    Seppo2, That's what I thought as well. Maybe the Euro regulators will have something to say about this.


    Also, 25+20+10+13+11+11 = 90. Where did the remaining 10% go? To smaller local vendors?
    22 Aug 2013, 12:41 PM Reply Like
  • SA Editor Eric Jhonsa
    , contributor
    Comments (857) | Send Message
    Yes. The article names FiberHouse Technologies, Nanjing Putian Telecommunications, and New Postcom Equipment as the companies receiving the remaining 10%.
    22 Aug 2013, 12:57 PM Reply Like
  • TheMasterPlan
    , contributor
    Comments (99) | Send Message
    Ah, thank you Eric. I should have clicked through.
    22 Aug 2013, 01:00 PM Reply Like
  • Doug Dallam
    , contributor
    Comments (8309) | Send Message
    This is the sort of thing that should be predictable: Best hardware, best technology, lowest price. This is the contract. However, this is how it goes: Best hardware, best technology, best price, of no concern.


    What a world: You're the fastest, smartest, strongest, and you still can't win.


    The favor can and will be returned. Perhaps when Microsoft needs some infrastructure, they will pay Nokia more so Chinese companies suffer. Double edged sword
    22 Aug 2013, 01:04 PM Reply Like
  • jjmc2001
    , contributor
    Comments (1293) | Send Message
    Perhaps ALU and NOK did not have enough Party member relatives on the payroll.
    22 Aug 2013, 02:34 PM Reply Like
  • Randal James
    , contributor
    Comments (2820) | Send Message
    This is how the Asians work and, truth be told how the Americans would like to work. We like big pieces of pie too!! The orders are split up, lots of domestic purchasing - everyone wins a little and saves 'face.'


    Worst example: for years the US had tried to get the Japanese to buy beef, which we produce in abundance and they cannot because land is too scarce. They do have the Kobe beef, which is handled so gently and pampered so much that it sells for $100 a pound. [I haven't priced it lately in Tokyo, but you get the drift.]


    How did the Japanese make us happy? They came over and bought working cattle ranches, herds and all. The calves were grazed to an appropriate weight - approximately 1,000 pounds - trucked to a decent airport where... modified 747 freight planes would taker the live cattle to Japan for processing and sale.


    That way, they controlled every cent of revenue and had the honest ability to say "We brought in XX million pounds of beef last year!" Not what the US meat packers had hoped for, but all the labor went to Japanese workers, the freight to Japanese haulers, etc.


    The kidneys, as with those in the US, probably went to Britain.
    22 Aug 2013, 02:44 PM Reply Like
  • mKiwi
    , contributor
    Comments (672) | Send Message
    I think as they say what goes around comes around.


    Nokia, Ericsson and Alcatel-Lucent probably all procure technology from Chinese and Taiwanese OEM's.


    Now in their turn everyone has received a slice of the pie and even though I am long Nokia that seems like a win for everyone :)


    And the Chinese home grown suppliers are supported without excluding the western suppliers.


    Better than NSN getting nothing.
    22 Aug 2013, 08:06 PM Reply Like
  • Coopmv
    , contributor
    Comments (8) | Send Message
    I am glad to see HuaWei being banned from the US market. It pilfered all the technologies from Cisco and particularly Nortel, which was driven into bankruptcy. No surprise there that it won the lion share of the Chinese telecom infrastructure business.
    23 Aug 2013, 04:05 AM Reply Like
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