VietNamNet Bridge – With the low pricing policy, Chinese telecom group Huawei has taken firm steps to conquer the Vietnamese market. Meanwhile, Vietnamese network operators have been told to take precautions when doing business with the telecom device manufacturer from the neighboring country.
2012 was a very successful year for Huawei which then became the biggest telecom device manufacturer in the world after outstripping Ericsson in terms of turnover. In Vietnam, with the low pricing policy, the manufacturer has swiftly defeated all the big rivals. Huawei Device has become the main supplier of telecom devices to nearly all the big network operators, namely Viettel,
Huawei’s products cheaper than anyone else’s
Before Huawei “attacked” the Vietnamese market, Vietnamese mobile network operators bought switchboards, core networks and base transreceiver stations (BTS) from the big European and US suppliers including Ericsson, Alcatel, Nokia-Siemens, Orange-France Telecom and Motorola.
However, the big guys have been defeated by Huawei, which has been following a simple competition policy – selling products at low prices. Huawei has made the BTS prices drop by 50 percent in comparison with the lowest price offered to Vietnamese network operators before. Especially, Huawei price is 10 times lower than the highest peak level.
The representative of a big mobile network operator, who asked to be anonymous, said that his company has to choose Huawei as the contractor for its telecom projects, or it would violate the current bidding law.
The current law stipulates that the contractor to be chosen must be the one who offers the most competitive price.
“Their (Huawei’s) offered prices were always the lowest and lower than any others. If we had not chosen them, we would have had to explain to inspectors why we did not choose the cheapest products,” he said.
Big mobile network operators have said that 40-50 percent of their telecom equipment are from Huawei. However, a telecom expert said the proportion is higher, about 70-80 percent.
Not only dominating the telecom equipment market, Huawei has also been trying to conquer the low cost mobile phone set and USB 3G market.
Bui Van Hoa, Deputy General Director of Vien Thong A, the biggest mobile phone distributor, has noted that Huawei has been following an ambitious plan to dominate the world market and it has initially succeeded so far.
Huawei, in its finance report, announced that its turnover reached $35 billion in 2012, and the net profit was $2.5 billion.
Vietnamese told to be cautious with Chinese products
Vietnamese mobile network operators have become beware of the products provided by the Chinese manufacturer after many countries regard the manufacturer with suspicion. Huawei is believed to keep a close relation with the Chinese government and act as the government’s tool to “supervise the world.”
Viettel, one of the Chinese manufacturer’s two Vietnamese biggest partners, has reduced its reliance on Huawei’s devices by making USB 3G itself. Other mobile network operators have refused using important devices including the switching systems made by Huawei.
Huawei’s Vice President -- John Suffolk, arrived in Vietnam in late 2012, when he had working sessions with the Ministry of Information and Communication and enterprises. He affirmed that Vietnam is one of the most important markets for Huawei and that Huawei would accept to let its products to be examined by any bodies to be authorized by local authorities.
However, despite Huawei’s efforts to drive away the suspicions, Vietnamese enterprises still keep beware of the products from the neighbor.