Tuesday, June 16, 2009

Chinese vendors set to dominate infrastructure market

The contention that Chinese infrastructure vendors (namely ZTE* and Huawei) are going to dominate the market has gathered more momentum. Tarek A. Robbiati, CEO of Hong Kong's number one mobile operator CSL said in London today that “Further consolidation will come in the next three to five years. In the end there will be only three [infrastructure vendors] left, and two of them will be Chinese. The European vendors are just too slow.”

Perhaps even more significantly, according to Telecoms.com who met with Robbiati today (Robbiati is in London with ZTE to discuss their work together in deploying an HSPA+ all-IP SDR network) he also argued that ZTE and Huawei can no longer be viewed as competing only on price - an accusation that has been levelled at the two vendors in the past. Price remained important, he said, but technical performance was the deal maker.

As this blog discussed back in March, ZTE is "confident" that it can maintain double digit growth in 2009 and, with a $15 billion line of credit from Chinese banks, drive market growth in the infrastructure market in Western Europe.

The combination of financial muscle, a production capability that can continue to thrive in an increasingly commoditised market, and a growing track record for innovation and R&D is a powerful one. Not least because there are some competitors who are reporting poor financials, are struggling to keep costs under control and are being driven to outsource more and more of their R&D and software development.

Well, they say the customer is always right ... and ZTE will be hoping that this one most certainly is.

* ZTE is an AxiCom client

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