Home Industry Deals Huawei eyes Optus 4G build out

PM Julia Gillard and Huawei's Sun Yafang PM Julia Gillard and Huawei's Sun Yafang Featured

Chinese giant Huawei may have been blacklisted from the NBN, but that hasn’t stopped it moving its substantial weight around in other areas.

Napoleon Bonaparte was a megalomaniac, but he was also one of history’s better strategists. He saw the Big Picture. He said of China, two hundred years ago, “There lies a sleeping giant. Let him sleep! For when he wakes he will move the world.”

Well, Boney, it has come to pass. China is the workshop of the world, the world’s second largest economy, and fast becoming a military superpower. It and its renegade province Taiwan make most of the world’s electronics. And it is home to one of the world’s largest telecommunications companies.

Fairfax newspapers’ business pages ran a major feature on Huawei on Saturday, along the lines of “the biggest company you’ve never heard of.” The general public might be a little ignorant of Huawei’s presence, but no-one in the communications industry is.

In an accompanying news story, published in both The Sydney Morning Herald and The Age, Fairfax media quoted a ‘senior industry source’ as saying that Huawei would get a large chunk of Optus’s impending $2 billion 4G network contract. Optus uses mostly Nokia Siemens Networks for its mobile network but has used Huawei equipment in LTE trials in Australia in the 700MHz band, formerly used for analogue TV. Optus is currently bidding for spectrum in this band.

Any substantial deal with Optus would be a major coup for Huawei in Australia, and go a long way towards assuaging its hurt feelings at being banned from supplying to the NBN on unspecified “security concerns” by Australia’s Parliamentary Joint Committee on Intelligence and Security. It has also been banned from government projects in the US, where it is accused of being too close to the Chinese Government,

Singtel and Huawei know each other well. In Singapore last year SingTel transferred 500 workers to Huawei when the Chinese company took over the maintenance of Singapore’s copper telephone network.

Huawei is working hard to improve its image in Australia. It has hired some heavyweight board members, such as former Victorian Premier John Brumby and former foreign affairs minister Alexander Downer, with retired rear admiral John Lord as chairman. Lord has said Huawei may eventually seek a listing on the ASX. Global revenues are US$34 billion. By way of comparison, Cisco is US$46 billion.

When Prime Minister Julia Gillard visited China in early April she met Huawei chair Sun Yafang, who told her Huawei had a long term commitment to the Australian market. Sun told the Prime Minister that Huawei was encouraged by the Federal Government’s ‘Australia in the Asian Century’ white paper, saying Huawei looked forward to playing a significant role in promoting opportunities in business and education between the two countries.

Sun said the Prime Minister encouraged Huawei to seek opportunities to grow its commercial business in Australia, and to continue to forge partnerships with Australian companies and educational institutions. “Huawei is committed to forging long-term business, community and education partnerships that will benefit the Australian people and the economy.

“We’re working with the Australian ICT industry to provide opportunities for local businesses to integrate into our global supply chain, giving Australian companies the benefit of involvement with Huawei’s advanced technologies and access to enhanced export opportunities.”

Sun said the establishment of a local board in Australia had been a great success for the local business, and that Huawei was looking at replicating the model in other markets around the world. Huawei Australia has grown from 20 staff in 2004 to over 700 staff today, over 85% of them Australian.

“Research and Development is critical to Huawei’s ongoing success,” Said Sun. “We will continue to seek partnerships with Australian universities and businesses to expand our technology and innovation programs. Huawei will launch a scholarship program in 2013, bringing Australia’s brightest ICT students to the company’s Shenzhen Headquarters to conduct a three-week training and work experience course.”

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Graeme Philipson

Graeme Philipson is senior associate editor at iTWire and editor of sister publication CommsWire. He is also founder and Research Director of Connection Research, a market research and analysis firm specialising in the convergence of sustainable, digital and environmental technologies. He has been in the high tech industry for more than 30 years, most of that time as a market researcher, analyst and journalist. He was founding editor of MIS magazine, and is a former editor of Computerworld Australia. He was a research director for Gartner Asia Pacific and research manager for the Yankee Group Australia. He was a long time IT columnist in The Age and The Sydney Morning Herald, and is a recipient of the Kester Award for lifetime achievement in IT journalism.

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