Huawei storming ahead on strength of Chinese 3G race

Peter Dinham
Friday, 15 May 2009 09:55

IT Industry - Strategy

Chinese telecommunications giant Huawei had a huge increase in revenues to $790 million for the first three months of this year on the back of the race to build 3G mobile networks in China.

Ovum, in its latest report on the global optical networking (ON) equipment market, says vendors worldwide in the first quarter this year recorded $3.6 billion in revenues, led by strength in the Asia Pacific region, most notably a revenue increase for Huawei of more than 40% and a 20+% increase for Chinese mobile phone maker, ZTE.

According to Ovum, the first quarter revenues of $3.6 billion were down 15% sequentially and down 8% compared with the first quarter last year.

Vice president ON at Ovum, Dana Cooperson, said the result “marks the second time in two quarters that the ON market has shrunk compared with the year-ago quarter, but given the global financial meltdown the situation could have been much worse.”

However, Cooperson says spending in Asia-Pacific was surprisingly strong, and Ovum did not see the seasonal decline it normally expected in China - “for example, as the race to build 3G mobile networks and support them with transport capacity obliterated any seasonality or macroeconomic downturn factors.

“Huawei, posting a remarkable $790 million in revenue to lead the market for the quarter, benefited from China’s 3G race, along with teledensity growth in India, a strong and stable currency, and comparatively little exposure to the cool North American market, while Alcatel-Lucent suffered from much of the opposite.”
 
According to Cooperson, of the top ten vendors, none posted both sequential and year-over-year revenue gains, reflecting slowing spending in much of the world.
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