Telenor tie-up could mean big money for China's Huawei

HONG KONG Nov 19 (Reuters) - Norway's Telenor (TEL.OL) said its new tie-up with Huawei Technologies [HWT.UL] could pave the way for a relationship worth billions of dollars down the road, in a watershed for the Chinese company's global ambitions.

In a major shift, Telenor effectively dumped its primary longtime equipment suppliers Ericsson (ERICb.ST) and Nokia Siemens Networks [NSN.UL] this month when it chose Huawei to build its fourth-generation (4G) mobile network and modernise its existing infrastructure. [ID:nL5381188]

Telenor CEO Jon Fredrik Baksaas told Reuters the deal could be a lucrative one for Huawei, which his company now considers its partner in developing a 4G network based on a technology known as Long-Term Evolution (LTE).

"This is a long-term contract, more than five years," Baksaas said in an interview on Thursday on the sidelines of a telecommunications show in Hong Kong. "The overall picture is we invest on an annual basis about 10 percent of sales in capex in Norway. A good percentage of that will be allocated to modernisation."

He said Telenor, which also operates services in a number of developing markets in Asia and Eastern Europe, allocated about 3 billion Norwegian crowns ($537 million) per year for capital expenditure in Norway, but the relationship could eventually expand beyond the company's home market.

"This is a significant contract," he said. "From Huawei's perspective, the prospects for Huawei to take it into other markets is a potential." ($1=5.587 Norwegian Crown) (Reporting by Doug Young; Editing by Chris Lewis)