Telefonica chooses China’s Huawei as a strategic partner

23 November 2005

Shenzhen, China, 23 Nov – Spanish telecom operator Telefonica has chosen Chinese company Huawei as a strategic partner in developing 3G and broadband and the two companies have agreed to join forces to expand in the Latin American market, a Huawei spokesman said Wednesday.

Telefonica and Huawei will cooperate in developing third generation mobile phone networks (3G) and digital broadband for domestic users.

The Spanish operator is one of the world’s largest telecommunications companies, serving 140 million customers in 40 countries, namely in Europe and Latin America. In Brazil Telefonica has a joint venture with Portugal Telecom, as the Vivo brand, in the mobile phone network. Huawei already supplies Vivo with materials.

Huawei, China’s largest manufacturer of telecommunications components, posted larger revenues from its overseas interest in 2005 than those from its domestic market.

Headquartered in Shenzhen, a special economic area of China that is contiguous with Hong Kong, Huawei recently announced that its sales had increased 85% to 33 billion yuan (USD 4.07 billion) in the first half of 2005. Of that total overseas sales accounted for USD 2.47 billion, more than total revenue for 2004.

In China Huawei became known for its low costs and aggressive sales teams. These tactics have made it possible for the company to overtake other better-known telecommunications component manufacturers. This year it has already beaten Motorola and Ericsson to a USD 187 million contract in Thailand. (macauhub)