Struggling Huawei Clinches Major China Mobile 5G Contract

Ren Zhengfei, Founder and CEO, Huawei Technologies

Huawei wins major contract to roll out tens of thousands of 5G base stations for China Mobile amidst financial pain from ongoing sanctions

Huawei Technologies is to supply more than half of a major order of tens of thousands of 5G base stations from China Mobile, China’s biggest telecoms provider, from 2023 to 2024 in a win that should bring in much-needed revenues for Huawei as it faces the ongoing strictures posed by US trade sanctions that have been in place since 2019.

The sanctions, including Huawei’s presence on a blacklist known as the “entity list”, block Huawei from acquiring high-end semiconductors or using US technology to manufacture them itself, and which led to a dramatic decline in revenues from its smartphone business, which once rivalled those of Apple and Samsung.

Huawei won a contract for 52 percent of China Mobile’s base stations, involving more than 45,000 base stations estimated to be worth about 4.1 billion yuan ($574m, £460m).

Competitor ZTE was second in bidding with about 26 percent of the contracts, or about 23,000 base stations, followed by China’s Datang, Finnish firm Nokia and Sweden’s Ericsson.


5G buildout

China Mobile solicited bids for the equipment in two contracts last month for the installation of a total of 86,980 base stations from 2023 to 2024, the biggest 5G base station contracts awarded this year, according to local media reports.

Last year revenue from Huawei’s consumer business, which includes smartphones, dropped 11.9 percent year-on-year to 214.5bn yuan while its carrier business grew by 0.9 percent to 284bn yuan.

The company reported sales totalling 642.3bn yuan for all of 2022, only 0.9 percent up from 2021.

The firm’s 2021 revenues were themselves down nearly 30 percent due to the sanctions.

Trade restrictions

The buildout of the country’s 5G infrastructure is considered to be levelling off, meaning it is not a long-term source of revenues for Huawei.

China had installed some 2.38 million 5G base stations over the past four years up to the end of February, according to government figures.

Last week the Financial Times reported that the EU is considering a mandatory ban on equipment from companies such as Huawei that are considered to pose a risk to national security.