Warid Telecom, the country's fourth largest mobile operator, is in talks with Chinese company Huawei to buy equipment for its network expansion, showing evidence that operators are looking for cheap solutions.

Huawei appears to be the cheapest solution provider in Bangladesh's highly competitive market for mobile equipment where European mobile equipment vendors dominate.

"We are in talks to sign a deal with Warid. But some time is required to complete the deal," said an official of Huawei.

Grameenphone, the country's largest operator, on Tuesday signed a multi-million dollar network expansion deal with Huawei.

Industry insiders said Grameenphone-Huawei deal is nothing but an example to the other mobile operators to go for low-cost technology as all operators plan to introduce 3G (third-generation) technology.

3G is the latest technology in mobile communications that is basically designed for providing mobile access to internet-based services.

Sources said Ericsson and Motorola are already involved in Warid's network expansion projects.

The telecom vendors in Bangladesh are now in a battle to grab the future market of 3G. The telecom regulator is now working to finalise a policy concerning how to award 3G licenses to the mobile operators.

In Bangladesh, Ericsson, Huawei, Nokia- Siemens, Alcatel-Lucent, Motorola, Cisco are the leading telecom vendors.

"We are delighted to choose Huawei as our second GSM equipment supplier," said Anders Jensen, chief executive officer of Grameenphone.

"Huawei's advanced technology and value-added services will help us to deliver an excellent mobile experience to our customers," he added.

"With our customised solutions and professional service capabilities, we are dedicated in helping Grameenphone strengthen its leadership and competitiveness in Bangladesh," said Kevin Tao, senior vice-president of Huawei.

However neither GP nor Huawei commented on the price for the order.

Besides Grameen, Huawei counts Teletalk, Aktel and Bangladesh Telegraph and Telephone Board (BTTB) as its customers in Bangladesh.

GP and other operators are under pressure to expand their networks, in the backdrop of a rapidly expanding pool of mobile phone users, in order to maintain service quality.

Industry sources said the move to break Ericsson's dominance also reflected Grameenphone's determination to cut costs. It is also common practice for mobile operators to have more than one supplier to ensure competition.

Three months earlier Garmeenphone called for bids, with Ericsson and Huawei taking part. Grameenphone choose Huawei because the company had offered to complete the network expansion work at a significantly lower price than that of Ericsson, sources said.

Cost reduction has become a pressing issue for GP during the past year as intense competition in the local market has forced operators to cut call charges while continuing to spend heavily on marketing.

Not only GP's, cost reduction is a major concern for all other telecom operators. At present, with the exception of GP all other operators are operating below break-even point.

Industry insiders said not only for their cost cutting strategy, but also the possibility of holding back the issuance of WiMax license to the mobile operators encourage them to just update their technology at a lower cost.

During his visit to Dhaka last month, Naguib Sawiris, chairman of Orascom Telecom Holding (OTH), said Banglalink would welcome 3G.

“We will stick to 3G. Because we believe, it is the continuation of GSM. It's much more easier for us to upgrade our technology by adopting 3G rather than WiMax," he said.

Source:thedailystar