China's Huawei forecasts $2.5b in 4G revenue this year

HONG KONG (REUTERS) - Huawei Technologies expects to take in more than US$2 billion (S$2.5 billion) in revenues selling 4G gear this year as global carriers from China to Europe expand their networks, senior company executives said on Wednesday.

Even though 4G LTE (long-term evolution) promises faster video streaming and Internet downloads, the cost of smartphones would need to come down before the technology can enter the global mainstream, they told reporters in a briefing.

"The price of LTE smartphones is still higher that those without LTE technology. This is normal," said Mr Peter Zhou, executive vice-president for the LTE business unit at Huawei, the world's No. 2 telecom equipment maker ranking behind Sweden's Ericsson.

There are 100 million 4G LTE users globally now, which makes up a small fraction of total mobile subscribers. That 4G number will grow to 1 billion in 2016, or more than half of total global subscribers, Mr Zhou said.

"We foresee that around 2015, a multi-mode smartphone, which includes LTE, will be very similar or equal to the price of a (usual) smartphone," he said. "So by that time, the portion of LTE smartphones will be much bigger."

Infrastructure spending in 4G LTE will nearly triple to US$24.3 billion this year from US$8.7 billion last year, according to research firm IHS iSuppli, fuelled by network expansions in major markets such as China, Japan and Germany.

So far, Huawei and Ericsson have a combined share of 74 per cent of the 4G market, Huawei executives said, citing data from research firm Informa.

Huawei's LTE revenues were insignificant last year, but grew quickly to US$1 billion in the first half of the year. They are on track to hit more than US$2 billion for the whole of this year, said Mr Bob Cai, vice-president for Huawei's wireless marketing.

With slowing economies in mature markets like Europe, China is seen as a bright spot for wireless growth, especially with China Mobile spending more on its 4G network as it is expected to get a licence this year, analysts said.