HELSINKI/NEW YORK (Reuters) – a dozen rural U.S. telecom service providers, which are dependent on Huawei for network gear are in a debate with his main rival, Ericsson, and Nokia as a replacement for their Chinese devices, sources familiar with the matter said.
FILE PHOTO: the logo, The ticker, Nokia will be shown on a display on the first floor of the New York Stock Exchange (NYSE) in New York, New York, USA, May 21, 2018. REUTERS/Brendan McDermid/File Photo
The operators, who include the Band, in the state of Alabama, and Union Wireless in Wyoming and are in search of a discount, and we look forward to the assistance of the government, but they have not yet reached the conclusion of the contract, these sources said.
Nokia and Ericsson declined to comment.
The sessions are essential for small carriers, who have to rely on Huawei Technologies Co. Ltd. or ZTE Corp. for a cheap, high-quality, mobile network, accelerating in the last few years, even as the major US telecommunications companies best sites fast and efficiently with the Chinese business. The U.S. government has labeled Huawei a security threat, the security, and are effectively banned U.S. companies from doing business with Huawei.
But, by changing suppliers, it will not be an easy one. Nokia and Ericsson, both of which have struggled financially over the past few years, which does not correspond to the Smartphone’s pricing, analysts and executives say.
Huawei’s prices were not market-based,” said an industry executive who has worked for many years in North America. “She was not good at all.”
Roger Entner, analyst at Recon Analytics estimated Smartphone, and its compatriot ZTE, with a surcharge of 30% to 50% less than the competitors.
The talks are not expected to go on to the laws of the united states Congress to provide $700 million in grants to help rural carriers with the switch were approved, sources familiar with the discussions said. No action has been taken on the bill since its introduction in May, according to the Congress.gov.
The Rural Wireless Association (RWA), a trade group, estimates it would cost between $800 million and $ 1 billion for the installation of the new gear.
John Nettles, president pine Belt, said he has reached with Ericsson, Nokia, last year, when the federal ban on the use of funds from the $8.5 billion Universal Service Fund, for the Chinese, the equipment was presented for the first time.
“The conversation has been going on for about a year, and they are looking for ways to bring the price within the reach of smaller operators,” he said. Without the discount, he added, rural carriers would not be able to afford it.
Union Wireless, said that it was in talks with Nokia, however, refused to provide the information.
Industry executives briefed on the talks confirmed that Nokia and Ericsson have been in talks with the national carriers, but a detailed discussion will not happen until later this year, as regulators are still trying to determine what parts need to be replaced.
Ericsson and Nokia, but it may have little incentive to offer discounts if economies of scale are not available in the rural carriers’ favor.
The $700 million is a possibility, it is scattered among small businesses, which, in the aggregate, according to an industry executive, the majority of the 2,000 base stations will be replaced. As a comparison, the top U.S. operators that each run networks of more than 50,000 base stations.
The availability of local labour force, which is managing the replacement of the equipment, it can also be a problem. “The scarcest resource in the united states. today is the day for the tower climb. There is tremendous job growth in this sector right now,” said one industry executive.
THE RISK OF SHUT-DOWNS
Rural wireless carriers, in most cases, between 50 000 and 100 000 subscribers in the outlying areas of the major telecom companies such as Verizon Communications Inc or AT&T, Inc., and are the only regional provider.
Among the carriers, with the smoke and heat extraction it is estimated that 25% of the members have a Huawei or ZTE equipment.
SI Wireless, which has 20,000 mobile customers in the western portions of Kentucky and Tennessee, he said, the majority of the network uses Huawei equipment.
Viaero, which is 110,000 mobile phone users in Eastern Colorado, Western Kansas, Nebraska and parts of Wyoming and South Dakota, said about 80 per cent of its network equipment, including core, wi-fi, a microwave, and fiber was produced of the event, according to the FCC documents.
“Rural telcos are very profitable, and many of the owners are in their late ’50’s,’ 60’s and ‘ 70’s. If they have to rip it out of their network, they are most likely going to quit if they do not soon find a buyer,” Recon Analytics’ Entner said.
This means the basic communications, was able to disappear from the poorly-served communities.
With the advent of 5G networks is an issue: companies may be forced to rip off the Chinese, the equipment should be able to try and move them to a 5G once, but that would be more expensive in the short term.
Still, 5G was able to provide to the national carriers of some of the leverage is with Nokia and Ericsson.
Handelsbanken analyst Daniel Djurberg noticed a small deal would boost the number of 5 g of win, Nokia, and Ericsson expect to make progress in the new technology.
Ericsson and Nokia are the most likely to be interested in the world, also for strategic reasons.
“It is very important to US, and these operators are acquired by larger operators, for later on, and they’ve positioned themselves,” said Bengt Nordstrom, head of the Stockholm based consultancy firm, Northstream, which advises mobile operators and vendors.
Reporting by Tarmo Vikri and Angela Moon; Additional reporting by Helena Soderpalm in Stockholm; editing by Jonathan Weber, Kenneth Li and Lisa Shumaker