Huawei, a leading Chinese telecommunications company, has been selected by Italian mobile operator Wind to lead the deployment of a €1 billion network based on LTE technology.
According to Bloomberg, Wind plans to build the infrastructure over five years in collaboration with Huawei and Italian network engineering firm Sirti. The contract positions both companies strongly: Wind is Italy’s third-largest mobile operator, and partnering with Huawei marks a major step in its network evolution.
Wind competes with Vodafone Italy and Telecom Italia, the three carriers that secured spectrum in the auctions held on September 29, 2011.
Last week Huawei released its audited 2012 financial results, reporting steady growth with a net profit of CNY 15.38 billion and total sales revenue of CNY 220.19 billion.
Guo Ping, Huawei’s rotating and acting CEO, said the company will continue to emphasize its “pipe” strategy—integrating and expanding services around the information pipeline—identifying big data and BYOD (bring your own device) as important trends shaping future development.
Approximately half of the value of the Wind contract is expected to flow to Huawei, which will further strengthen the vendor’s financial position. The Financial Times reports that Huawei will assume a controlling role in the venture.
In a busy week for the company, Huawei also introduced what it claims is the telecom industry’s first LTE small cell router. The ATN 905 is intended to help operators extend backhaul capacity, a critical component for connecting small cells to the core network and improving coverage and capacity in dense urban areas.
Huawei’s success in Europe has been notable, even as the company has faced resistance in markets such as the United States and Australia. Those governments and carriers have raised security concerns about Huawei and its founder, Ren Zhengfei, citing potential links to the Chinese government.
Ren has consistently rejected those suspicions, noting that he left the People’s Liberation Army more than 30 years ago. Commentary from analysts, including a September paper by Dan Steinbock, argued that Ren and Huawei have often been misunderstood in the U.S.
As Wind moves forward with this LNG deployment and with Huawei taking a leading role, the deal raises several considerations: the impact on competition among Italian operators, potential benefits to consumers from improved LTE services, the strategic implications for Huawei’s position in Europe, and ongoing debate about security and vendor trust in critical telecom infrastructure.
What are your thoughts on Huawei’s role in this project and the broader implications of the partnership?