Huawei confirms talks to sell stake

By Rich Zhu  |   2008-6-21  |     NEWSPAPER EDITION

HUAWEI Technologies Inc confirmed yesterday it is in talks to sell a stake of its mobile phone business, which analysts estimated is worth US$4 billion.

Huawei Technologies Inc, China's biggest telecom equipment maker, said the move would help its mobile phone business to be more "globally oriented."

"We are really in talks to sell the stake (of mobile phone business) to private equity firms but we can't provide more details at present," Yu Jie, the company's spokesperson, said during a phone interview yesterday.

Yu also declined to say when the deal will be completed.

Carriers AT&T and Vodafone and private equity firms including Blackstone, TPG and Kohlberg Kravis Roberts have been reported as possible buyers, according to earlier media reports.

Huawei has shipped 30 million handsets and terminal cards up to May, generating a revenue of US$1.8 billion, 10 percent of the company's total revenue. Last year the Chinese vendor sold 40 million handsets and modem cards, worth US$2.6 billion, according to reports.

Huawei's mobile phone unit is valued about US$4 billion, according to consulting firm BDA China.

The global handset market is more and more dominated by the top firms, such as Nokia and Samsung.

By the end of first quarter, the combined market share of the top two handset vendors Nokia and Samsung by sales was 53.5 percent against 47.9 percent a year ago, according to Gartner Inc, a US-based IT research firm.

Lenovo Group Ltd has already sold its mobile phone unit for US$100 million.