A Huawei-Marconi Marriage?
After being dismissed as simply a low-cost player, Huawei Technologies seems to be gaining serious street cred. Huawei received a huge boost when BT Group selected it as one of eight preferred vendors for a US$19-billion next-generation contract. Now, there is speculation (according to Lightreading) Huawei could pursue Marconi to beef up its technology portfolio and management bench strength. Marconi’s suddenly in flux after missing out on the BT deal – a major surprise given BT accounts for about 25% of Marconi’s annual sales. At current prices, Marconi's worth about US$1-billion.
It was one thing for the telecom sector to be worried about Huawei eating their lunch on price, it’s quite another when a global carrier such as BT picks Huawei’s technology to be a key part of its next-generation network. Armed with plenty of financial support from the Chinese government, Huawei has the ability to win business through vendor financing, and make large investments. If Nortel and Cisco were worried about Huawei before, they have more reason to be even more concerned.
