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Huawei opens shop in Nokia's backyard in Europe expansion

The Chinese telecommunications vendor says it is investing $90 million in the Finland facility over the next five years, and plans to double its work force in Europe over the next three to five year.


Nokia is getting a new neighbor.

Chinese telecommunications equipment vendor Huawei said today it wants to expand into Europe, and plans to build a smartphone center in Helsinki, Finland, just minutes away from Nokia's own headquarters in Espoo -- facilities that Nokia just sold off as it seeks to right its financial ship.

Huawei said in a statement e-mailed to CNET it plans to invest 70 million euros ($90.3 million) in the facility over the next five years, and will double its work force in Europe to 14,000 over the next three to five years.

Huawei's ascension comes as Nokia cuts its own staff and shuts down facilities around the world, illustrating the shift of power in the mobile world. While Nokia is pegging its turnaround on the success of the Windows Phone platform and its Lumia smartphones, Huawei has seen dramatic growth thanks to demand for smartphones running on Google's Android operating system. The Chinese company is out to prove that it is a major global player, and has been investing heavily in overseas operations.

"The open and innovative environment in Finland is an ideal place for Huawei to strengthen our global R&D capabilities for devices, creating opportunities for both Huawei and the Finnish telecommunications industry," said Kenneth Fredriksen, vice president in charge of Central, Eastern and Nordic Europe, in a statement.

Although Huawei has invested in the U.S., its operations have largely been focused on business network equipment. The company still faces security questions in the U.S. and Australia, which is one reason the company decided to invest more heavily in Europe, which has more readily embraced the company.

Huawei has already hired 20 people for the business, and plans to more than 100 people in the next five years, according Dow Jones Newswires. The facility will focus on user experience on both the Android platform and Windows Phone operating system.

That's a source of jobs for many displaced by the cuts at Nokia, which Finland is still struggling to deal with. The cuts have left the country rich in engineering and R&D talent to be tapped.

Nokia declined to comment on the Huawei move.

Huawei's primary strength has been in equipment for telecommunications providers, but it has seen its share of the smartphone market grow. Still, its smartphone business only has a fraction of the market in many major countries despite enhancements to its product lineup. In the U.S., for example, Huawei phones are largely lower-end devices sold by the prepaid carriers, although some products have been picked up by the national service providers as well.

Updated at 7:33 a.m. PT: to include responses from Huawei and Nokia.