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Huawei Said to Win First U.K. Mobile-Phone Equipment Order

May 6 (Bloomberg) -- Huawei Technologies Co., China’s largest phone-network equipment maker, is close to announcing a wireless network order from Everything Everywhere, the U.K. joint venture between Deutsche Telekom AG and France Telecom SA, said two people with knowledge of the matter.

A deal, which would be the Chinese company’s first major wireless win in the U.K., may be announced May 9 from Shenzhen, China, where Huawei is based, said the people, who declined to be identified before a press event.

Huawei won part of a contract with BT Group Plc for fixed-line broadband gear in 2005. After starting off in China’s rural communications market and then expanding that strategy through Asia and Africa, Huawei is now looking to boost sales in Europe and the U.S. to further close the gap with Swedish rival Ericsson AB.

“For Huawei it would be a big step if they won a part of that contract,” said Stuart Jeffrey, an analyst at Nomura International Plc from New York. “That would be an endorsement of their product quality.”

Yingying Li, a U.K.-based spokeswoman for Huawei, declined to comment. Everything Everywhere also declined to comment.

Orange, T-Mobile

London-based Everything Everywhere, which operates the T-Mobile and Orange brands, became the largest mobile-phone company in the U.K. after a merger of the U.K. units of Bonn-based Deutsche Telekom and France Telecom in 2009. The company had 27.7 million customers at the end of March, after losing 155,000 users as it shifted customers to longer contracts.

The venture, which announced 1,200 job cuts last year, is targeting more than 3.5 billion pounds ($5.7 billion) in savings. The company invested 321 million pounds in capital expenditure last year.

Ren Zhengfei, the chief executive officer who founded Huawei in 1987, built the company into the world’s second-largest maker of equipment for mobile-phone networks.

The company was vying to build a mobile-phone network this year on the London Underground in time for the Olympic Games in 2012 before the operators ended the project.

Huawei said last month that it planned to double its workforce in the U.K. to 1,000 people over three years as it expands its handset unit and seeks corporate clients. The company is also seeking to gain customers for high-speed fourth-generation mobile services.

To contact the reporter on this story: Jonathan Browning in London jbrowning9@bloomberg.net.

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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