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Huawei will launch 4G Dongles by December

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China-headquartered Huawei Technologies is planning to offer its 4G solutions to support broadband operators in India by December 2011. The company is in talks with Indian operators such asMukesh Ambani-owned Reliance Industries Ltd (RIL) for rolling out Long-Term Evolution (4G) solutions.

A 4G system provides IP-based mobile broadband solutions to laptops, computers, wireless modems, smartphones and other mobile devices. Huawei is working on LTE solutions since 2005.

Mr Ying Weimen, President of GSM, UMT and LTE network at Huawei, said: “We are bullish on our entry in India which will be by December 2011. We expect full fledged roll out of LTE network by 2012.”

Huawei's foray into LTE broadband solutions and 4G technologies indicate its shift toward new verticals in the fast growing telecom sector in the country.

4G dongles

Meanwhile, the company is planning to introduce chipsets for 4G dongles by this year-end in India and will later move on to offer chipsets for terminals, smartphones and tablets. It plans to manufacture one lakh such 4G-enabled devices – primarily dongles – by the end of this year.

Mr Weimen added that Huawei is looking forward to an increase in penetration of mobile broadband and wireless access including the demand for tablets (which require larger bandwidths) for gaining a foothold in the LTE segment.

“The 3G spectrum available in India is very small and does not allow much scope for the operators to provide high speed downloads. As a result, there is bound to be an early shift to 4G networks,” he said.

New Geographies

Along with India, the company is also planning to enter the North America and South African markets with its LTE offerings. The company plans to compete with US-based Qualcom, in the field of wireless networking solutions.

Huawei had clocked revenues of $28 billion (Rs 1,26,000 crore) in 2010. The company follows the calendar year for accounting purposes.

Huawei's first commercial deployment of LTE technology outside China took place in 2009 when it was selected as a vendor by the Norwegian telecom operator TeliaSoneria and later to Vodafone Germany.


When Huawei serenaded Mukesh Ambani in China

Early this month, Huawei Technologies Co Ltd’s sprawling campus in Shenzhen was host to an unusual visitor from India: Mukesh Ambani.

The chairman of Reliance Industries held secret confabulations with Huawei’s top brass including the reclusive founder and CEO Ren Zhengfei, as he prepares for a grand entry into the broadband space in India.

That he was serenaded is a given because of the many-multimillion dollar orders for LTE (acronym for Long Term Evolution, the latest mobile communication technology) equipment that he is expected to sign on.

For large telecom vendors, India has been a subdued

market in the last two years.

If security issues played the speed breaker initially, economic and political vagaries, brutal competition and chary bankers throttled growth last fiscal.

As a consequence, Ericsson, the market leader in telecom equipment, saw its revenues in India plunge 29.4% from Rs8,749 crore in 2009-10 to Rs6,173 crore in 2010-11, while Huawei saw a decline of 23.5% from Rs7,433 crore to Rs5,688 crore, according do Voice & Data, a journal tracking the telecom sector.

All that’s slated to change.

By December this year, analysts expect the telecom market look up as spends on 3G rollouts commence.

“The long-term story is robust. Telecom vendors such as Huawei will look at gaining market share for a price,” says Prashant Singhal, who heads the telecom practice for Ernst & Young, the auditor and consultant.

In Europe, the telecom markets swung down immediately after 3G auctions, only to rebound strongly after 3 years.

Some vendors are more optimistic.

Dabing He, president of marketing, enterprise business group, Huawei, estimates the Indian equipment market will touch $10 billion in five years, with his company growing in tandem.

Huawei will position itself as an end-to-end solutions provider and even offer terminals such as dongles and handsets compatible to 4G or LTE networks.

The Chinese telecom gear maker has told marketing staff in India they will be measured for performance this year on sheer market growth and not on profitability or margins.

“Indian margins are lower than elsewhere in the world,” Dabing He said. “We’ll concentrate on penetration and growth, and we’ll leave a small room in terms of pricing,” he said.

That would be welcome news for Indian operators.

Huawei has succeeded in snaring a few circles where Bharti Airtel operates— territories that, for over a decade, was the backyard of European vendors such as Ericsson and Nokia.

While RIL is a new player in the telecom market, Huawei hopes its previous experience of working with Chinese companies will help.

Ambani also has a past track record of doing business with the Chinese: RIL had contracted work to Chinese companies for setting up pipelines and also when its refineries were being built.

At present, Ambani is in the midst of setting up another telecom venture ground-up through Reliance Infotel, a subsidiary of RIL.

It will offer fourth-generation broadband, in tango with similar launches in the US and South Africa.

For Huawei, Ericsson and Nokia, winning the equipment order from Reliance will be a major coup because RIL is known for big-bang launches.

Huawei’s senior officials were guarded about the Ambani trip, but are bullish and effervescent when quizzed about the Indian market as a whole.

The company has done business in India with Bharat Sanchar Nigam Ltd and Aircel and a few others for equipment and devices.

Yang Weimin, president of LTE product line at Huawei, said India will be next only to China in the coming years for the company.

“This is just the beginning for us in India,” he said.

Next year is crucial for Huawei as well as for the telecom world, Weimin said, because of India, US and South Africa going live with LTE.

In China, though, the story will be different. That’s because the bandwidth owned by telecom operators for third-generation is bigger, so Huawei expects China to adopt LTE slower than India.

“India will be very aggressive in LTE deployment. We can see a deployment by RIL in India by 2012,” another Huawei official, who did not wish to be named, said.

Huawei has invested heavily in the development of the LTE industry since 2004.

“Huawei’s advanced LTE technology and SingleRAN LTE solution enables telecom companies to gradually shift to newer technologies whenever they are introduced. It will replace outdated legacy base stations, while simultaneously initiating their LTE network deployment,” said the official.

Vodafone Germany and TeliaSonera in Norway have already selected Huawei as a vendor

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RIL's 4G plans. Today's story in ET. http://economictimes.indiatimes.com/tech/hardware/ril-plans-to-offer-4g-services-on-rs-3500-tablets/articleshow/11000888.cms

RIL plans to offer 4G services on Rs 3500 tablets

MUMBAI: Mukesh Ambani's Reliance Industries plans to offer high speed data services on attractively priced tablets by 2012-end, which will coincide with the worldwide deployment of an advanced technology that it plans to use, two people familiar with the development told ET.

The company had earlier planned to launch services by mid next year on data cards that could be plugged into computers and laptops. The RIL services is based on fourth generation, or 4G, technology which offers faster internet access compared to third generation (3G) services. RIL plans to launch tablets at around Rs 3,500 and bundle it with data offering as low as 1 GB at Rs 10, a tenth of the current 3G prices.

RIL's entry and price disruption could therefore nullify the business case for 3G for existing mobile operators, all of whom on an average offer 1 GB of downloads for Rs 100 at present. Analysts also add that the immediate threat posed by RIL's entry will be to operators like Sistema Shyam and Tata Teleservices, the largest players in the dongle business, plug-in devices that provide wireless connectivity to the internet.

An industry expert who asked not to be named said: "Frankly I am quite surprised that none of these companies is treating RIL's launch as a threat at the moment. I would think it is time to start gearing up for it. I don't see any of them doing anything." RIL is the only company to have pan-India spectrum to offer wireless broadband services on the 4G technology platform having paid Rs 13,000 crore for these airwaves.

It will be launching services based on Qualcomm's long term evolution, or LTE, technology, which is currently in test phase. Global majors like Vodafone, Verizon and Telenor have deployed LTE networks in some developed markets. While subsidising devices will be main pillar of RIL's upcoming 4G mobile services offerings, the company is also analysing lessons from its previous foray into mobility. India's largest private sector company had launched mobile services in 2003, before the group was split between brothers Mukesh and Anil Ambani. At the time, it offered mobile handsets at an initial payment of Rs 501.

In 2006, after Anil Ambani took charge of the telecom unit of the divided Reliance group, the operator struggled with unpaid bills and wrote of nearly Rs 4,500 crore primarily on account of the discount scheme. The RIL management is still working on structures that will avoid defaults of a similar nature, said one person. The company said its broadband offerings were still in the planning phase and no dates had been finalised.

"Infotel Broadband Services is currently in the process of actively evaluating various technologies that will form a part of its pan-India rollout. At this stage, we have neither finalised a date for launching the services, nor the various types of services and associated tariff plans that we would offer at launch," the company spokesman said in an e-mail statement. "It is our intention to make all of our offerings device agnostic, and our services will be supported by a wide variety of devices from multiple vendors. We will, at appropriate times, make announcements about our plans," Reliance Industries spokesperson said. Currently the cheapest tablets in the market are between Rs 12,000 and Rs 13,000, including one of Reliance Communications at Rs 12,999, which it plans to bring down by 50% by late next year as volumes increase. Tablets and smartphones spur increases in data consumption and these services are billed at a premium giving some relief to operators hit by falling profit margins due to hyper competition in the voice calling space.

Last year, the industry had forked out Rs 51,000 crore to get 3G airwaves on which they could offer faster data services. A disadvantage that RIL is expected to contend with is the lack of penetration and inflexibility of LTE devices to use other technologies. Here too, history may repeat as in 2003, RIL picked Qualcomm's CDMA technology when all other operators used global system for mobile communications, or GSM.

While it was able to garner subscriber numbers, CDMA never became a premium service, and average revenue of Reliance Communications and Tata Teleservices the only two CDMA operators at the time, have remained far lower than industry average, forcing them to launch GSM operations in 2008 to garner premium clients.

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