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Mobile Giants Circle Over Huawei Handset Sale

(20 May 2008, BWCS Staff)

Mobile powerhouses Vodafone and AT&T are said to be among the front runners to snap up the 50% stake in the handset division of Huawei Technologies that the Chinese company plans to sell. Huawei hopes to raise up to US$2 billion by letting in a new investor, it is thought that the move is also aimed at boosting confidence in the brand.

According to reports in the South China Morning Post, the two telecoms companies, plus a host of private equity outfits including Blackstone, TPG and Kohlberg Kravis Roberts have all expressed an interest in the sale. The mobile operators are known to be keen to fight back against the encroachment into the services area by handset vendors such as Nokia and Motorola by selling their own branded handsets, carrying their own services.

Huawei's handset division is reportedly profitable, and the vendor is said to be seeking increased funding in order to boost its mobile phone production to 50 million devices a year. A major problem with granting an ownership stake to one mobile operator, however, is that the new stakeholder is likely to deter other operators from purchasing Huawei handsets.



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