China Mobile has selected its compatriots Huawei and ZTE as equipment suppliers for a converged 4G/5G core network contract reportedly worth CNY7.5 billion ($1.16 billion).
Local news outlet C114.net reported that the contract’s scope has not been fully revealed, but noted that Huawei and ZTE respectively offered CNY7.49 billion and CNY7.46 billion. The similar size of their offers suggests that the vendors may have been the only two parties to submit bids.
This would in turn mean that Nokia and Ericsson had declined to bid. Both overseas vendors have recently won contracts in China, with China Mobile respectively awarding Nokia and Ericsson a 10.1% and 9.7% share of a 5G radio contract in July this year. The following month Ericsson secured a 3% share of China Telecom and China Unicom’s joint 5G RAN tender.
Ericsson’s success comes despite an ongoing dispute between China and Sweden which caused the vendor to lower its expectations for the market. Nokia however has stated that it is keen to make inroads in China, with CEO Pekka Lundmark confirming that the vendor would bid on China’s second round of network tenders.
However, their reticence to bid on the China Mobile contract would not necessarily be surprising. Chinese operators have historically favoured domestic vendors – particularly in the face of increased pressure among western markets to shun equipment from Chinese suppliers – and indeed, Huawei and ZTE have won the majority of network contracts in the market.