Domestic vendors scoop 50% of China Mobile tender

23 Aug 2013

China Mobile, the largest cellco in the world by subscribers, has awarded initial contracts for the supply of 4G equipment worth a combined total of around CNY20 billion (USD3.24 billion), with the biggest shares going to domestic vendors Huawei and ZTE, Reuters writes citing industry sources. ZTE and Huawei each bagged around 25% of the tender, whilst European vendors Alcatel-Lucent, Ericsson and Nokia Solutions and Networks (NSN) garnered 10% of the contracts apiece. The tender forms a major part of Mobile’s planned investment of CNY42 billion on Time Division Long Term Evolution (TD-LTE) in 2013 as the cellco gears up for the expected distribution of 4G concessions before the end of this year.

The cellco’s tender was also the centre of a conflict between the European Union (EU) and Beijing regarding the dominance of Chinese vendors within the EU. The EU was contemplating launching a case against Huawei and ZTE for using government subsidies, in the form of cheap credit from state banks to both the two vendors and their customers, to offer goods and services at unfairly low prices. However, European suppliers spoke out against the plans, fearing that moving against the duo would harm commercial opportunities in China.

As previously noted by CommsUpdate, EU trade commissioner Karel Du Gucht, previously one of the most vocal advocates of challenging the Chinese companies, said he was inclined to abandon the case should European companies be awarded a healthy share of the China Mobile tender. In January this year, Chinese diplomats complained to EU member states that the commissioner had demanded that European companies receive a 30% share of China’s network equipment market, in exchange for dropping his investigation into Huawei and ZTE, although a spokesperson for De Gucht said that the Chinese officials had either misunderstood or misrepresented his views.