Summary
1. An alliance between T-Mobile and Huawei would do wonders for both companies. 2. This alliance shows that Chinese companies are no longer in the background and need to be considered as mainstream competition. 3. This will provide a mutual benefit for the two companies and create synergies that each individually could not attain.
Analysis
Believe it not, Huawei is one of the pure plays in the global telecom market. Huawei has a reputation of providing services to customers at a very optimal price and this has been taken note of by the majority of its customers, a number of them being repeat customers. Last year, Huawei and Cisco joined hands in the areas of networking products that includes the WiMAX technology. Now Huawei is going to provide Packet Switched Core Networks technology to T-Mobile. This bodes well for both the companies. Just like Cisco, T-Mobile needs a low-cost partner like Huawei to remain competitive, especially in the market where prices are going down year after year. This is very important as this alliance is not localized but is across five European countries. I think this will eventually help Huawei becoming a big supplier to the US market that will lead to increased competition and eventually lower prices.
The one major downside is the history of alliances that Huawei has undergone unsuccessfully. This should not be construed that the T-Mobile alliance will also fail but it is a thought that people need to think about.
Bottom line, this alliance is very good for both the companies and once this occurs, this partnership will become a formidable competitor to other telecom vendors.
