Huawei lands U.S. CDMA deal

Huawei has won its first major wireless infrastructure contract with a U.S. carrier, announcing today it will deploy its CDMA 1X equipment in Leap Wireless’ growing regional network.

The Chinese vendor has been aggressively selling telecom equipment worldwide, beating incumbent vendors in key markets by undercutting them in price while still maintaining its technological edge. Its sales have ranged from switching and optical contracts to GSM, CDMA and 3G deals in developing regions such as Africa to heavily competitive, mature markets in Japan and the U.K. The North American wireless market, however, has been a tougher nut to crack, especially in the CDMA sector where there are two dominant vendors, Nortel Networks and Lucent Technologies, as well as several other established players such as Motorola.

“We believe this contract is a key milestone for Huawei in North America,” said Carl Liu, Huawei’s senior vice president of sales, marketing and support in the U.S. “We’ve been in this market for five years. In the previous years, we’ve been listening to our customers and optimizing our technology for their needs.”
Though the Leap deal isn’t Huawei’s first infrastructure deal in the U.S.—it launched a CDMA network with California’s Cleartalk in 2004—it is certainly a major step up the carrier ladder. Leap has been growing rapidly growing since coming out of bankruptcy. It now has 1.8 million customers. Furthermore it is expanding into new markets, which gives new vendors the opportunity to grab new network business. Leap said it plans to expand its footprint to cover an addition 17 million to 20 million people in 2006.

Although Leap isn’t a Tier 1 vendor, it has traditionally been willing to try out newer vendors’ technologies. It was the first U.S. vendor to buy Ericsson’s CDMA base station after the company acquired Qualcomm’s infrastructure business, though the Swedish network giant has since shut that division down.

Other Asian CDMA vendors, most notably Samsung, have tried to gain traction in the U.S., but they’ve found most of their overtures rebuffed. Samsung, however, altered its strategy and began targeting U.S. carriers with WiMAX. The gambit paid off as Sprint last week awarded Samsung a major piece of its multibillion-dollar WiMAX infrastructure contract.

Huawei itself has looked to partner to become more competitive in established markets. Last month, it inked a deal with Motorola to combine UMTS research and development and allow Motorola to resell its core base station product to its GSM customer base.

Leap will deploy the new Huawei gear in three of its expansion markets: Spokane, Wash.; Boise, Idaho; and Reno, Nev. While Leap is only taking the standard 1X kit for now, Huawei said that all of its base stations are EV-DO and EV-DO Revision A ready, meaning they require only a software upgrade and the change-out of control module card.

It is also supplying core switching infrastructure for the carrier, using its new end-to-end IP core in the new markets.

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