Lowest bid: NSN surprises in China 4G tender

Nokia Siemens Networks has thrown a curveball into China Mobile’s multi-billion dollar 4G tender by undercutting the field.

It is the first time a non-Chinese telecom vendor has bid below Huawei and ZTE in a China contract.

The tender, to supply TD-LTE equipment for 207,000 base stations in 100 cities, is the world’s biggest telecom equipment contract this year. 

NSN’s bid of 33,000 yuan ($5,460) per single carrier was the lowest of nine vendors who took part, according to Chinese media reports. Huawei and ZTE both pitched 35,000 yuan.

The move has surely surprised the super-confident Huawei camp, which has publicly predicted it would win the biggest share.

Huawei and ZTE have supplied roughly three-quarters of the equipment for China Mobile’s pre-commercial rollout in 13 cities.  That’s only slightly below the 80% share of China Mobile’s TD-SCDMA 3G network contracts that they enjoyed. 

But foreign vendors have expected a much bigger piece of the globally-supported TD-LTE business, and were reportedly furious at the heavy weighting toward the local players in the trial stage.

As local tech website Sina Tech [zh] delicately observes, China Mobile now faces a “difficult choice.” As the lowest bidder, NSN “normally” would get the highest share.

“But for many years tenders by Chinese operators have tilted towards domestic suppliers, with Huawei and ZTE accounting for the lion’s share, [making it] impossible for foreign vendors to dominate.”

China Mobile is bound by rules of the tender to award to the lowest bidder, yet must “balance between Chinese and foreign” suppliers, it said.

The tender is sure to be watched closely by EU officials for any obvious domestic ‘tilt’. The EU Trade Commissioner has launched a probe into alleged state subsidies for Huawei and ZTE exports to Europe.