Who's afraid of the big bad Huawei?

Summary:commentary Whatever Huawei does in the Australian market this year, one thing is sure: its competitors will be watching closely. The Chinese networking vendor has earned a reputation for winning deals by savagely undercutting their prices.

commentary Whatever Huawei does in the Australian market this year, one thing is sure: its competitors will be watching closely.

Renai LeMay, ZDNet Australia
The Chinese networking vendor has earned a reputation for winning deals by savagely undercutting their prices.

And although it only has a relatively short history down under, several large contracts have already come Huawei's way.

The nation's second-largest telco Optus announced in February last year that Huawei would supply the network hardware used to build its next-generation ADSL2+ network.

And in December last year Zimbabwean mobile phone operator Econet announced Huawei would supply third-generation (3G) mobile phone hardware for a new service to be based in Auckland.

Vendors like Ericsson -- which currently has 1,400 engineers building Telstra's new national 3G network and is also a leading ADSL hardware supplier -- must be horrified at these developments, given the amount of money involved.

Optus alone will spend around AU$150 million on its new network.

Certainly the local telcos and CIOs -- who can only benefit from the increased competition -- are all too aware of what's going on.

AT&T's local managing director Jeyan Jeevaratnam told your writer yesterday his (predominantly large enterprise) customers were moving away from a Cisco-centric mentality.

"I think two years ago it was all Cisco, and I think that's changed," he said.

"Our customers are saying, we want to be able to use Juniper, we want to be able to use Huawei, we want to be able to use Polycom -- from a routers and a video conferencing perspective -- and Avaya for IP telephony, and Siemens and so on."

In any case Huawei has made it plain it plans to stay.

The vendor -- previously located in Melbourne -- announced in December its new Sydney HQ situated next to Vodafone's office in Chatswood would form "the nerve center of Huawei's operations in Australia, New Zealand, South Korea, Hong Kong and the South-Pacific Region".

But wait, there's more.

"The decision to locate its East-Pacific headquarters in Sydney is largely due to Huawei's belief on Australia's strategic location in the Pacific Rim and that the country itself boosts a rapidly developing next generation telecommunications infrastructure with a highly-skilled workforce," the vendor's Web site states.

Huawei has also joined the influential industry body the Service Providers' Association, signalling its intentions to play a part in the development of policy, and signed local distributors for enterprise hardware.

With the billions of dollars the large carriers are currently allocating, and a renewed interest from enterprise customers in next-generation converged networks, who could blame Huawei for wanting a piece of the pie?

The question will be, of course, just what level of service customers can expect from a vendor competing primarily on price.

What do you think Huawei's impact will be? Are their prices too low to sustain or will they win significant business from the incumbents? Send your thoughts to renai.lemay@zdnet.com.au

Topics: Telcos, Cisco, Mobility, Networking, Optus

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