LONDON U.K. telecom equipment market Marconi has taken a giant step toward expanding its operations into the Chinese and Asian markets, linking with Huawei Technologies Inc. in a deal that will allow it to provide Huawei's carrier-grade data products to key customers in Europe while the Chinese company would get access to Marconi's access radio gear.
The companies have signed a memorandum of understanding about how they can collaborate in strategic markets and, importantly, have discussed how Marconi can help Huawei's aggressive pursuit of infrastructure business in Europe, especially the U.K.
The link also raises the possibility of a takeover by Huawei (Shenzhen, China) of the U.K. group should the partnership flourish.
The partners are also discussing a joint product development agreement that would permit each to derive benefits from the sharing of R&D resource and technologies.
According to Mike Parton, Marconi CEO, "The next stage of our relationship will be to develop jointly new products that would then be sold through our mutual distribution channels. This is an important first step in what we believe will be a long and mutually beneficial working partnership."
The deal with Huawei would double Marconi's size in terms of turnover. Huawei has been very aggressively expanding out of its Chinese base with extremely competitive prices.