Chinese telecoms and networking vendor Huawei Technologies Co has pulled off a further coup in its advance onto the international stage, signing a five-year deal with Vodafone Group to provide it with 3G handsets in 21 of its properties across the globe.
The contract with the world’s largest multi-country mobile operator (China Mobile is larger than Vodafone in subscriber numbers, but they are all in one country) puts Shenzhen-based Huawei on the map in terms of the international handset business, even if, to land the deal, it has had to agree to omit its own brand from the phones.
The phones, which will be launched in September, will bear only the Vodafone name.
The deal is Huawei’s calling card for all other mobile operators around the world. It mirrors the Chinese group’s inclusion, last year, on the list of equipment suppliers to UK incumbent BT Group for its $20 billion 21st Century Network project for an all-IP network by the end of 2008, which became its reference when talking to fixed-line carriers.
Huawei, like all the other Chinese manufacturers, needs to score deals in the international market to compensate for its poor performance on the domestic front in 2005, where big-name western vendors like Nokia and Motorola staged a comeback with new low-end propositions last year and are now actively developing the ultra-low cost phone for the sub-$30 bracket.
For Newbury, UK-based Vodafone, this is the culmination of a process of imposing an own-brand strategy in handsets, aping NTT DoCoMo, which is able to exert far greater control on the market via its ownership of i-mode.
The saga of Vodafone’s efforts to own the customer account by monopolizing the branding opportunity on the phone dates back to the late nineties, when Nokia reigned supreme in the European market, and to a far greater degree than it does today. The Finns doggedly refused to adopt such a self-effacing stance to accommodate the UK behemoth, or any other carrier for that matter. In those days, European consumers wanted a Nokia phone, rather than to be with Vodafone or Orange.
With the advent of 3G telephony, new challengers entered the handset market from Asia, Samsung and LG in particular having made significant inroads in western markets.
We have also seen the rise of the so-called ODM (original design manufacturer) in the East, with the likes of High Tech Computer Corp (HTC) being only to happy to provide white-label devices for operators to brand as they see fit. Indeed, HTC already does just that with two business phone/PDA offerings for Vodafone, namely the Vodafone 1620 and 1650. The Huawei phones will be the first consumer 3G devices to appear from Vodafone without the manufacturer’s name, however.
At last year’s CeBIT fair in Hannover, Germany, Vodafone announced a deal for phones from Toshiba, where the Japanese vendor, until then absent from the European market, would have its name on the device, but very much in a subaltern role to Vodafone’s. With Huawei, the process is complete.
A source at Vodafone said the deal not only brings Huawei European exposure, but also experience in markets where 3G is already up and running.