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