Axiata may select Ericsson for 5G network, cutting share of Huawei

Axiata, the third largest telecom operator in Malaysia based on mobile subscribers, may select two network equipment suppliers to roll out 5G services, opening the door for Ericsson and Nokia to grab share from dominant player Huawei.
Axiata MalaysiaHuawei Technologies, the world’s top telecoms equipment maker, is supplying network for Axiata for several years. Huawei and Axiata have a preliminary agreement to work together on deploying 5G network in Malaysia, slated for later this year.

Celcom, the brand of Axiata, is eyeing spending at least $1 billion towards its Capex (capital expenditure) over as many as five years for building 5G network. But it has not yet signed any other 5G agreement.

“Generally we like to have two vendors, and in Malaysia, generally it would be these two,” Axiata Chief Executive Jamaludin Ibrahim told Reuters on Saturday, referring to Huawei and Sweden’s Ericsson.

He said other telecom leading network suppliers such as Finland’s Nokia and China’s ZTE would also be invited to participate in an open tender that would eventually decide the two suppliers.

Axiata is confident of securing supplies from Huawei despite the U.S. Commerce Department this month expanding the country’s authority to require licenses for sales to Huawei of semiconductors made abroad with U.S. technology. United States says Huawei’s equipment can spy on customers, a charge the company denies.

Jamaludin said the security matters have been discussed between its representatives, the government and Huawei.

“You can’t be very sure, but what assurance we have been getting from Huawei, we are confident,” he said. “We have (also) been assured many times that despite all the relationship with some countries they will survive and they will be able to supply us, there will be continuity.”

Jamaludin said Axiata could spend at least $1 billion on 5G in Malaysia over the next three to five years and was in talks with rivals to jointly deploy the services with one or two partners to cut costs. He declined to name the parties.