Will Huawei finally make it big in America?
The Chinese telecommunications equipment maker scores a big deal and is close to making a second with a couple of U.S. service providers, reports The Wall Street Journal.
Chinese communications equipment maker Huawei has nailed an important deal and is close to striking a second one with American service providers, according to The Wall Street Journal.
The company, which has tried for several years to crack the U.S. market, has scored a deal with cable operator Cox Communications and is a finalist in bids to help Clearwire build its nationwide 4G wireless network using a technology called WiMax.
Clearwire expects its network to be available to 120 million people by 2010. And it is currently selecting equipment suppliers to help it build the network. The new Clearwire was formed at the end of last year when it merged spectrum assets from Sprint Nextel with its own. Sprint had also planned to build a nationwide 4G wireless network using WiMax. The company had also selected vendors to build the network, including suppliers Motorola and Samsung. But the new Clearwire is not bound to Sprint's previous vendor contracts.
The Journal noted in its article that if Huawei wins a significant piece of the Clearwire contract, it would be the Chinese manufacturer's largest deal in the U.S.
Huawei has won smaller deals, like with regional, low-cost cell phone provider Leap Wireless, but for the most part, the company has struggled to get a toehold in the U.S. market.
Huawei had formed a joint venture with U.S.-based networking company 3Com in 2003. But 3Com's business was in trouble and the company announced in 2007 that it would be sold to a private equity firm and Huawei. But the U.S. government blocked the purchase in 2008, citing security concerns.
The failed merger with 3Com was a setback for Huawei, but the company along with other Chinese equipment makers like ZTE have still managed to do very well in Western Europe and in developing parts of the world by selling their equipment at much cheaper prices.
For example, Vodafone and France Telecom SA's Orange both use Huawei gear. And the company is also helping build a third-generation wireless network in Canada for Bell Canada and Telus.
But as the economy sinks deeper into a recession, U.S. service providers are likely looking for bargains, which could help Huawei and ZTE win business here , too.