Huawei, ZTE Take Largest Contracts As China Mobile Speeds 5G Rollout

Huawei and ZTE have taken the lion’s share of 5G contracts from China Mobile worth a total of 37.1 billion yuan (£4.3bn), as the carrier looks to accelerate its next-generation mobile network this year.

Huawei was awarded 57.2 percent of the contract, followed by ZTE at 28.7 percent and Ericsson at 11.5 percent.

Smaller Chinese company CICT is to build the remaining 2.2 percent of the carrier’s total 232,143 planned 5G base stations this year, covering 28 provinces.

Ericsson was the only non-Chinese company to be awarded a deal after Nokia reportedly bid but failed to win a contract.

5G rollout

The deal comes amidst trade tensions between the US and China that have seen the US pressuring allies not to use 5G equipment made by Chinese firms.

Huawei is the world’s largest telecommunications equipment manufacturer, and is also one of the top smartphone makers, competing neck-in-neck with Apple and Samsung.

It is supplying 5G equipment in countries around the world, aside from countries including the United States, Australia and New Zealand, where it has been banned on national security grounds.

The British government has identified Huawei as a “high-risk vendor” but recently said it could play a “limited” role in the UK’s 5G networks.

China Mobile last year awarded Ericsson and Nokia 6 percent of its first-phase 5G rollout last year.

The carrier is expected to account for about 50 percent of China’s 5G expenditure, and is competing with a rival network being built cooperatively by China Unicom and China Telecom.

Profits

The award came after Huawei last week announced a 19.1 percent increase in annual sales to $123bn (£99bn).

Net profit rose just 5.6 percent to $9bn, which roating chairman Eric Xu said was due to the ongoing US embargo imposed in May 2019.

In announcing the results Xu said the Chinese government would not stand by and watch Huawei being “slaughtered on the chopping board”.

“If the US government can arbitrarily change the rules that would be the destruction of the global technological ecosystem,” Xu said.

China’s Politburo Standing Committee last month ordered companies to accelerate the construction of new infrastructure, including 5G networks and data centres, as part of a stimulus plan aimed at mitigating the economic effects of the coronavirus pandemic.