China Mobile awarded a network contract valued at CNY7.5 billion ($1.16 billion) to the country’s major equipment vendors Huawei and ZTE, with Ericsson and Nokia left out in the cold after recently winning slices of major deals with domestic operators.
The final size of the converged 4G/5G core network contract wasn’t disclosed, but C114.net reported Huawei and ZTE submitted similar bids of CNY7.49 billion and CNY7.46 billion respectively (suggesting they may have been the only two vendors to bid).
With Huawei increasingly blocked from deploying its 5G gear in western countries, the move by China’s largest operator to not use kit from the two non-Chinese vendors will not surprise, but will disappoint Ericsson and Nokia after the duo recently gained ground in the market.
In July, Nokia Shanghai Bell secured a 10.1 per cent share of a 5G radio contract from China Mobile, while its Swedish rival was awarded a 9.7 per cent share. A month later Ericsson won about a 3 per cent share of a joint 5G RAN tender from China Telecom and China Unicom, with the Finnish-based vendor left out.
While Ericsson was prepared for a lower market share in mainland China due to an ongoing spat between China and Sweden, Nokia was hopeful for an improvement in the market, with CEO Pekka Lundmark earlier vowing to bid on the second round of network tenders.
The vast majority of the two tenders were given to Huawei and ZTE.
In September, Ericsson announced it would close a research facility in China, denying the decision was prompted by a loss of market share.