Vodafone tests Chinese mobile phone equipment

Vodafone Group, Europe's largest mobile phone operator, is testing several network systems from Chinese manufacturers with the intention of purchasing equipment within the next few years.

The purchase of handsets is also a possibility but one that would follow much later, Vodafone spokesman Ben Padovan said Friday, confirming remarks made by the company's Chief Executive Officer (CEO) Arun Sarin in an earlier interview with The Wall Street Journal at a conference in Spain.

The purchase of equipment from Chinese manufacturers would be a big boost for that country's budding mobile phone industry, led by heavyweights Huawei Technologies and ZTE. The move would increase competition for Nokia of Espoo, Finland, and Telefonaktiebolaget LM Ericsson of Stockholm, Sweden, which are two of Vodafone's key suppliers of mobile phone equipment.

Vodafone of Newbury, England, spends around £5 billion ($9.23 billion) annually on network equipment and other capital expenditures, according to the company's Web site.

Padovan declined to say which Chinese manufacturers are supplying equipment for the tests, what type of equipment is being tested and when the tests are expected to be completed. "We're really in a very early stage of testing, so we have very little to say at this time," he said.

He also declined to comment on why Vodafone is testing Chinese equipment, saying only that the operator is keen to drive down costs and also use superior systems.

In an interview with IDG News Service at the Telecom World conference and exhibition in Geneva last December, Huawei spokesman Richard Lee said the Chinese company is delivering a message that many service providers and enterprises want to hear. Huawei, he said, is able to manufacture equipment that is "as good if not, in some cases, better than our competitors and it's available at a much lower cost."

In a move that cynics could interpret as "if you can't beat them, then join them," Munich-based Siemens has forged partnerships with Huawei in several areas, including the resale of routers and the joint production of mobile broadband systems.