POLAND: Netia (Now P4) Chooses Chinese Firm for 3G

UNCLAS WARSAW 000363

SIPDIS

STATE FOR EUR/NCE/MSESSUMS
STATE PASS USTR FOR DONNELLY/ERRION
COMMERCE FOR 4232/ITA/MAC/EUR/OECA/MROGERS

E.O. 12958: N/A
TAGS: ECPS EINT EINV PL
SUBJECT: POLAND: Netia (Now P4) Chooses Chinese Firm for 3G
Buildout


1. (U) According to a recent Netia/P4 press release, Chinese
telecoms equipment vendor Huawei won a contract to build
third-generation (3G) infrastructure. P4, formerly known as
Netia, won a license last year for a Universal Mobile
Telecommunications System (UMTS) license. UMTS services are
designed to offer high-speed data transfer not only for
voice, but messaging, internet access, etc., via 3G (Third
Generation) mobile phone architecture.


2. (U) According to the announcement, the value of the first
stage of the deal, the biggest contract signed in the past
12 months in the telecommunications sector in Europe,
amounts to EUR 150 million. P4 would not disclose the total
value of the contract to reporters, nor would it say how
many stages the deal involved. But information from public
sources indicates that under contract terms, Huawei will
provide general solutions for telephony, 3G streaming media,
and other high-speed services.


3. (U) The first phase of the 3G network will provide
coverage to Warsaw, Krakow, and several other major cities.
However, the network will operate only in a "beta" mode
starting in September, followed by a general commercial
launch by the end of 2006. This represents a delay of about
half a year, as Netia Mobile had announced its original
intention to roll out service in June 2006 when it won the
UMTS license last summer. In a discussion with Econoff,
Netia staff said the decision to go with a Chinese company a
low-cost alternative to the more established players from
the United States and Western Europe was an obvious one. No
information was available on what, if any, U.S. firms may
have expressed interest in the project.


4. (U) P4 is a joint venture between Icelandic-owned Novator
(70%) and Netia (30%). The company, previously known as
Netia Mobile, won the UMTS license in a tender August 2005.
HILLAS