Spark forges closer ties with China's Huawei

Spark has also started work replacing equipment on its XT network with Huawei's single radio access network (SRAN). Photo / Peter Meecham

Spark New Zealand has got closer to Chinese telecommunications vendor Huawei Technologies in an expanded deal to accelerate the roll-out of mobile services and upgrade the local carrier's XT network.

The two companies last week signed a memorandum of understanding, witnessed by Prime Minister John Key and Chinese Premier Xi Jinping in Auckland, which will let Huawei tailor technologies for Spark, using the Chinese firm's mammoth spend on research and development.

Huawei won Spark's contract to build a long-term evolution (LTE) network, commonly known as 4G, which is expected to drive revenue growth for the telecommunications company as it transforms into a data services retailer.

A poll of some 600 delegates at a telecommunications conference in Shanghai last week said the biggest benefits from LTE was a boost in average revenue per user (ARPU), which they largely expected would rise by about 20 per cent.

An increase of that order would lift Spark's ARPU to $36.12 a month from the $30.10 rate it reported in the six months ended June 30.

Spark chief operating officer David Havercroft said it has already developed new customer and business products since working with Huawei.

Spark has also started work replacing equipment on its XT network with Huawei's single radio access network (SRAN), which is expected to boost performance for users.

Since entering the NZ market in late 2005, Huawei has grown its annual revenue to $131.8 million in the 2013 calendar year for a net profit of $4.1 million.