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Huawei Technologies, the largest Chinese telecom equipment maker, yesterday signed a deal worth 30 million euros (US$38.4 million) with German operator Versatel Holding Deutschland GmbH, which is expected to boost its presence in the largest European telecom market.

 

The two firms signed a memorandum of understanding in Beijing, in which the Chinese firm will be responsible for building a fibre-optic communication network based on Internet protocol (IP) for Germany's third largest fixed-line operator.

 

It is the first time Huawei will provide technology for the whole network of a German operator. The deal is also one of the largest the firm has ever made in Germany, where it has had less success compared to European countries such as Spain and the United Kingdom.

 

"This is a milestone for Huawei in Germany," said Ding Shaohua, senior vice-president of the Shenzhen-based Chinese giant.

 

The firms' cutting-edge "dense wavelength-division multiplexing" allows the transmission of many signals through a single fibre. That means different applications such as voice calls and the Internet can run together at a very high speed.

 

Versatel is the third largest fixed line operator in Germany after Deutsche Telekom and Arcor with 700,000 subscribers. Its network is based on different assets from 14 acquisitions, giving it a strong reason to want a unified IP network.

 

"We are facing a lot of important challenges, and we need a reliable partner to handle these challenges," said Peer Knauer, CEO of Versatel, whose revenues are expected to reach 690 million euros (US$883 million).

 

Hai Cheng, chief operating officer of the German firm, said Huawei was swifter than other companies in planning and executing its bid for the deal.

 

Huawei will deploy the infrastructure for the Dusseldorf-based Versatel as well as provide total solutions.

 

Cheng expects the project to take at least one year, due to the complexity of the task.

 

Germany, with its strategic importance in the European telecom market, has been a focus for Huawei, which has opened four offices and one technical assistance centre in the country.

 

Last year, Huawei worked on a project with Arcor to build a next-generation network. But overall, it has not had much success in Germany.

 

Huawei serves Vodafone, Telefonica in Spain, and British Telecom in the United Kingdom.

 

Huawei's sales from overseas markets exceeded the domestic market for the first time last year at 58 percent. It serves 28 of the world's top 50 telecom operators.

 

(China Daily November 16, 2006)