Huawei Aims to Beat Ericsson in New Gear Orders

Huawei Technologies Co., China’s biggest telecommunications-equipment maker, forecast it will beat Ericsson AB to become the top producer of gear for the next generation of mobile-phone networks.

“We have confidence we are better than others, we are better than number two,” Ying Weimin, president of closely held Huawei’s business devoted to the fourth-generation wireless technology known as long-term evolution, said in an interview in Hong Kong yesterday. “Globally, we believe we have the best market position.”

The comments underscore growing confidence among Chinese equipment makers challenging Ericsson and Nokia Siemens Networks in the $38 billion market for phone gear such as routers and switches. Huawei and Shenzhen-based ZTE Corp. are set to capture half of industry orders in five years, compared with about 30 percent now, because they’ve caught up with Western rivals in terms of technology, said Jim Tang, an analyst at Shanghai-based Shenyin Wanguo Securities Co.

“Huawei and ZTE are truly emerging powerhouses in the telecommunication arena,” Sanjay Kapoor, chief executive officer of Bharti Airtel Ltd., India’s largest mobile-phone operator and a Huawei customer, told the Mobile Asia Congress in Hong Kong today. “These are significant changes that are happening that need to be given some notice.”

Ying, 37, said global contracts for long-term evolution, or LTE, equipment will probably reach $10 billion in 2014 as mobile-phone operators double orders each year to meet soaring demand for faster wireless connectivity. His forecast exceeds the $6 billion estimate that Redwood City, California-based research company Dell’Oro Group made for the market in August.

Huawei is likely to extend its market-share gains because of its head start, Ying said, declining to specify figures. The company has won 17 LTE contracts after it helped Sweden’s TeliaSonera AB start the world’s first 4G commercial network in Norway last year and “early, big investments” have resulted in 270 patents related to LTE with the European Telecommunications Standards Institute, he said.

“For the older generations of equipment, the global players dominated the market,” said Tang at Shenyin Wanguo. “Chinese players will have a more key role in the market for new equipment.”

Huawei increased research and development spending 27 percent to $1.95 billion last year across Asia, North America and Europe, according to data supplied by the company. Huawei, which describes itself as “100 percent owned by its employees” reported sales of $21.8 billion and net income of $2.7 billion last year.

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