Huawei wins lion’s share of China Mobile’s 5G base station contracts, in much needed boost to revenue
- Huawei secured 52 per cent of the China Mobile 5G contracts, representing 45,426 base stations, well ahead of cross town rival ZTE with 23,227 5G base stations
- After a 5G buildout frenzy over the past four years, ‘China’s 5G infrastructure development has already slowed and passed its peak’, according to Omdia
Huawei Technologies will supply over half of the 5G base stations for China’s top telecoms company China Mobile between 2023 and 2024, a deal which analysts say will help shore up its core revenue base after losing its lucrative smartphone business amid tough US sanctions.
Huawei secured 52 per cent of China Mobile’s 5G base station work, the largest portion of the contracts put out for tender this year. The deal would involve the sale of 45,426 5G base stations worth about 4.1 billion yuan (US$574 million), according to calculations by the South China Morning Post using bid details published by China Mobile.
Huawei’s crosstown rival ZTE was the second-largest winner, accounting for about 26 per cent of the contracts awarded, equivalent to sales of 23,227 5G base stations. Chinese company Datang, Finland’s Nokia and Sweden’s Ericsson were the remaining successful bidders.
The successful firms were announced last Friday, about a month after China Mobile solicited equipment suppliers to bid for two contracts for the installation of a total of 86,980 5G base stations between 2023 and 2024, adding to China’s existing 5G network, considered the world’s largest. The China Mobile tender represents the biggest 5G base station contracts awarded this year.
The China Mobile 5G win would be a boon for the Chinese tech champion, whose revenue growth has lost steam in recent years after the US restricted its access to advanced semiconductors, said Yang Guang, a senior principal telecoms analyst at research firm Omdia.
China’s state-run telecoms companies have been an important revenue source for Huawei, which was founded in Shenzhen in 1987 by Ren Zhengfei, initially to sell telephone exchange switches.
Washington has barred Huawei from purchasing off-the-shelf advanced semiconductors or using wafer foundry services to make them, citing national security grounds, dealing a heavy blow to its once lucrative handset business. Last year, revenue from Huawei’s consumer business, which includes smartphones and other consumer electronics, declined 11.9 per cent year on year to 214.5 billion yuan.
