China Telecom Giant Targets North American Market: Report

Chinese telecommunications equipment giant Huawei Technologies Co. Ltd. is seeking to move into the North American market through alliances with North American vendors, possibly including Lucent and Nortel, according to a report in the Beijing-based China Daily.

The newspaper quoted Huawei executive vice president Zheng Baoyong as saying that the company is more inclined to strengthen its position in North America through strategic partnerships than "fighting it out on our own." Moreover, Zheng identified who those partners might be: "We are talking with telecom equipment makers such as Lucent and Nortel Networks this year to further our partnerships so as to better position ourselves," he told China Daily.

Neither Lucent nor Nortel were prepared to confirm Zheng's statements.

Huawei already has a significant presence in North America, operating its Futurewei subsidiary in Richardson Texas, with offices in Santa Clara and San Diego, and it seems likely to grow. "In fact," Zheng told China Daily, "venturing into developed markets like the United States and Europe will become a significant part for our growth in the years to come."

The company's international sales have experienced impressive since 2001. In that year, overseas sales jumped 156%, and then leveling off to a still-substantial 68% in 2002 and 90% in 2003, before growing 117% last year. Overseas sales accounted for $2.28 billion of Huawei's $5.56 billion total sales in 2004.The company's big push has been in third-generation wireless networking technology. Huawei won its first big North American contract last December when wireless service provider NTCH Inc. selected the company's products for its CDMA 1X wireless network in California and Arizona.

Huawei launched its CDMA 2000 IP distributed solution last week, designed to allow network operators to implement a wide range of new wireless services at reduced costs. According to the company, combined with its NGN (next generation network), the CDMA 2000 solution can scale to 1.8 million subscribers 2.7 million busy hour call attempts.