Enice wins AU$8.4m contract with Hubei Mobile

Chinese telecommunications infrastructure provider Enice has announced winning a contract tender with China Mobile subsidiary Hubei Mobile worth 39 million yuan (AU$8.43 million) for indoor distribution and construction of wireless local area network (WLAN) services.

The contract [PDF], to be filled over the course of 2016 and 2017, is for five sections in Hubei Province -- for which the Australian Securities Exchange (ASX)-listed Enice (Electronics Network Information of Century East) is already renovating distributed antenna systems (DAS) products in another contract for Hubei Mobile worth AU$0.15 million.

Enice will also be providing China Mobile with three million DAS antennas over the next two years, in a contract worth AU$8.53 million. In winning the DAS tender, Enice secured 17.07 percent [PDF] of China Mobile's centralised purchasing program for DAS antennas.

News of Enice's latest contract win follows the company's announcement in late December that it had secured six new contracts worth a combined AU$14.19 million [PDF] to build out telecommunications infrastructure to the Hubei, Hebei, and Henan provinces.

The contracts involved a network engineering agreement with Zhejiang Mobile, worth AU$3.6 million over 2016 and 2017; a communication pipeline construction project for Henan Mobile, worth AU$2.35 million; the previously mentioned DAS services renovation for Hubei Mobile in Q4 2015, worth AU$0.15 million; urban network construction for Jiangsu Mobile in a contract worth AU$3.55 million with Southern Communication; wireless and RF product provision to Hebei Mobile, forecast to generate revenue of AU$1.98 million over 2016 and 2017; and an advanced solutions contract with Alcatel-Lucent Shanghai Bell, worth AU$2.56 million.

"We are delighted to see continued momentum in new contract wins for Enice, and are particularly pleased to be awarded contracts by several high-profile participants in China's telecommunications sector," CEO Wei Yu said on December 24.

"Importantly, these contract wins also broaden Enice's reach into new geographies which we have specifically targeted for future growth. In particular, our expansion into the strategically important Hubei and Henan provinces is an important beach-head for our growth."

This followed the company announcing its successful tender to supply network engineering services, wireless, and RF products to China Tower [PDF] -- a company owned jointly by China Mobile, China Telecom, and China Unicom -- in mid-December. China Tower was established by the three primary Chinese telcos in 2014 to manage construction, operation, and maintenance of DAS systems, mobile towers, and base stations, holding $36 billion in network assets and planning to build 150,000 mobile towers to act as base stations.

This successful tender saw Enice sign up to supply DAS antennas in the Jiangsu, Henan, and Shandong provinces.

"The company's success in winning these tenders with China Tower Company demonstrate that Enice is delivering on the strategy that we set out when the company listed; an important part of which is to commercialise our relationship with this group and to expand into new provinces in China," Wei Yu said on December 14.

"It is encouraging to see that our DAS antennas are competitive and gaining traction in the market. The company will continue to invest in R&D to deliver high-performance antenna products."

At the same time, Enice confirmed that it would exceed its previous FY15 profit guidance of AU$87.44 million in revenue and AU$8.52 million in net profit.

Enice debuted on the ASX on October 30 after announcing its initial public offering (IPO) in August.

The supplier has been operating for 15 years in China, building and providing telcos with wireless technologies and supporting services, and is in talks with Australian telcos to bring its services to the country.