Huawei Technologies was beaten by Ericsson and Nokia Siemens in the Long Term Evolution (LTE) networks deal with TeliaSonera recently on "commercial reasonsterms", and it seems that foreign equipment vendors are intensifying their competition in an aggressive pricing strategy, a China Business News (CBN) report Thursday said.

At first Huawei was seen as the primary candidate to win part of the deal after TeliaSonera selected it, together with Ericsson, in its original rollout in the capitals of Norway and Sweden in January 2009.

As the first LTE operator in the world, TeliaSonera's deal this time is a weather-vane of the upcoming LTE market and would have been a significant order for Huawei.

Although TeliaSonera did not disclose the financial details, its CTO Lars Klasson said that Huawei is a good partner and it lost finally because the other two offer better commercial terms, which usually means a lower prices in telecom industry parlance.

Huawei's spokesman in Beijing did not respond, but a marketing manager in its European center said that Huawei did not win the deal because the other vendors offered lower commercial terms.

In the past, it was rare for Huawei to lose due to its prices positioning, and thus it seems that the foreign equipment vendors are adopting a more aggressive pricing strategy, the CBN report said.

TeliaSonera's selection of the suppliers signals the first shot in the competition on the LTE market and brings the time for the commercial operation of the LTE a year forward since the Japanese operator DoCoMo originally planned to be the first LTE globally in the latter half year of 2010.

Although due to reasons like market maturity and availability of licenses of the LTE industry, it is too early to predict the large-scale adoption of LTE globally, while battling for the market share for the LTE times in advance has become the consensus among the major suppliers, especially for Huawei and Ericsson.

But according to figures from European¡¡Telecommunications¡¡Standards¡¡Institute¡¡Intellectual¡¡Property¡¡Rights (ETSI IPR), Huawei is still in a leading position in LTE patent applications. To the end of August 2009, among the 1,272 LTE patent applications in the world, Huawei owns12 percent.

But Ericsson said in a statement in January this year that the company expects to hold 25 percent of the core patents to become the largest patent holder in the global LTE industry.

Nokia Siemens also participates in competition in an aggressive way, and the LTE contract with TeliaSonera is the largest LTE order that the Nokia Siemens has so far.

Nokia Siemens has adjusted its marketing strategy and structure globally and put more emphasis on the number of the orders, which means that Huawei may fight for orders in a more aggressive way and lower prices, the CBN report said.

Gabriel Brown, analyst from Heavy Reading, said that the operators need to keep a diversity of the equipment vendors to ensure competition on the market. He added that since Huawei provides LTE equipment for Telenor, TeliaSonera's main competitor in North Europe and this may also have influenced TeliaSonera's choice of vendors.

In December 2009, Huawei got a LTE network contract from Net4Mobility, venture of Telenor and Tele2 in Sweden. Although Huawei did not get the deal from TeliaSonera, industry analysts said that Huawei has already had enough LTE base stations in North Europe.

source:globaltimes