Huawei and ZTE will build a support 5G network for Chiba Mobile for $1.16 billion

In early October 2021, China Mobile chose Huawei and ZTE to build a supporting 5G network, abandoning the services of the Scandinavian telecommunications companies Ericsson and Nokia. The project cost is estimated at $1.16 billion.

The exact financial details of the transaction were not disclosed, but Chinese media reported that Huawei and ZTE offered 7.49 billion yuan and 7.46 billion yuan, respectively.

China also activates a fourth wireless provider - China Broadcasting Network (CBN) - to which the Chinese government has provided spectrum. CBN enters the wireless market by partnering with China Mobile to jointly build and share a 5G network under an 11-year agreement.

Huawei and ZTE will build a support 5G network for Chiba Mobile for $1.16 billion

The joint venture between China Mobile and CBN enters into the bulk of its contracts with Huawei and ZTE, leaving only a small percentage for Ericsson and Nokia. Other wireless carriers - China Unicom and China Telecom - follow the same scheme.

However, Ericsson and Nokia have improved prospects in most regions of the world, as competition from Huawei and ZTE has been eliminated by sanctions.

In September 2021, Ericsson announced that it was closing one of its five research centers in China. By November, the company ceased its research and development in Nanjing. Ericsson also reported a significant decline in revenue in 2021 as a result of the loss of business in China, winning only 3% of the joint contract between China Unicom and China Telecom RAN and 10% of the separate main contract.

Nokia did not fulfill any major Chinese contracts in 2020, in the summer of 2021 the company received only minor support: Nokia Shanghai Bell received a 10.1% stake in one of the three tenders for 700 MHz from China Mobile.^[1]

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