Wind Telecomunicazioni SpA, the Italian phone company owned by Russia’s VimpelCom Ltd. (VIP:US), will spend 1 billion euros ($1.3 billion) in the coming five years to build a high-speed mobile network.
Italy’s third-largest mobile provider, based in Rome, has hired Shenzhen, China-based Huawei Technologies Co. and Milan- based Sirti SpA to supply equipment and infrastructure services, the companies said yesterday in a joint statement.
“This is certainly one of our biggest contracts in Europe,” Roberto Loiola, Huawei’s head of Western Europe, said in a conference call. Half of the revenue from Wind’s contract will go to Huawei, Loiola said.
Like other European carriers, Wind is betting that faster wireless service will help attract clients who are willing to spend more on their monthly subscription. EE in the U.K. and France Telecom SA (FTE) have adopted similar strategies. Wind, which has a 23.2 percent market share according to data compiled by Italian regulator Agcom, has been refocusing its phone packages to include more services to raise prices, shifting away from a low-cost strategy.
Huawei, China’s largest maker of network gear, has predicted an increase in spending this year from carriers building out faster networks using a technology called long-term evolution. Ryan Ding, head of Huawei’s Carrier Network Business Group, forecast in February that the unit’s sales will increase by 9 percent this year to about $28 billion.
While business for Huawei has been flowing at home from the likes of China Mobile Ltd. (941), the company is fighting concerns over cyber-security abroad in some markets, including the U.S., as American intelligence agencies and security companies traced Web attacks to China.
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