Huawei said it will outspend Ericsson in research and development in a bid to win clients on technology rather than just price tag, Bloomberg reports, while separately the Chinese giant welcomed the presence of European rivals in its home market.
Citing Li Yingtao, head of R&D for the vendor, said that Huawei is set to invest in areas such as improving fixed and mobile network performance, and audio and video transmission. This will include work with operators in areas such as radio access networks.
Li said: “Phone calls still drop, internet browsing is slow as soon as you hop on a train and you completely lose your connection when you board a plane. Today carriers don’t need a technological disruption, they need answers to their network problems. There’s still a long way to go to meet just standard needs.”
Ericsson and Huawei are slugging it out in a race to be the biggest infrastructure vendor, a fierce battle that has already seen rivals such as Nokia Siemens Networks and Alcatel-Lucent slimming down in order to focus on profitability over outright size.
According to Bloomberg, both Huawei and Ericsson invested around $4.9 billion in 2012, although as a percentage of sales this was slightly lower for the Chinese company (which also offers devices and enterprise products).
While Huawei has gained significant traction in its international operations, there has been a backdrop of speculation it has offered products at below market prices in order to build its market share.
Earlier this year, the EC said it was mulling an investigation into the import of telecoms equipment into Europe by Chinese vendors, including whether subsidies from the state had allowed them to offer products at cut price.
However, it was noted that this action is taking place without a complaint having been made by a competing vendor, all of who see the Chinese market as a potential opportunity – and therefore are unlikely to want to upset the status quo.
Earlier this week, Xinhuanet reported that Ding Yun, head of Huawei’s carrier networks business group, had welcomed competition from European vendors in its home market, noting that these companies have “brought high-quality and technically innovative products and services” to the market.
China Mobile is in the process of a large tender for TD-LTE equipment, which is likely to see companies such as Ericsson and Alcatel-Lucent on the bidding list.