Vodafone Group Plc, the world's biggest mobile-phone company, may buy equipment from Huawei Technologies Co as it seeks to cut network-building costs for services that let users make video calls and download movie clips.
Vodafone this month completed tests on Huawei's system, Vodafone managing director for China Jonathan Kriegel said in an interview in Beijing.
China Mobile Communications Corp, the nation's biggest cellular carrier, also took part in the four-month trial in Shanghai, Huawei director Yu Chengdong said.
European carriers including Newbury, England-based Vodafone have delayed starting so-called third-generation (3G) wireless services as they wait for equipment costs to fall after spending a combined US$100 billion on phone permits in 2000.
Vodafone and China Mobile may be able to secure cheaper prices from Huawei, China's biggest phone-equipment supplier, and other vendors by placing joint orders.
"Apparently Vodafone is pushing China Mobile quite hard to place orders at the same time so they can gain more bargaining power from the vendors," said Daniel Kirwin, managing director of Institute of International Re-search for Asia.
An order from China Mobile would be "probably worth more than what Vodafone orders for all of its European operations," he said.
Vodafone, which had 123 million users in more than 30 countries at the end of June, has a 3.27 percent stake in China Mobile (HK) Ltd, the publicly traded unit of China Mobile Communications. The Chinese company is the world's biggest mobile-phone company by subscribers, with 150 million at the end of June.
The tests of Huawei's system, which uses the wideband-code division multiple access standard, may not immediately lead to contracts, though Vodafone won't rule out choosing Huawei as a future supplier, Kriegel said.
A contract to supply Vodafone would mark Huawei's first major entry into the Western European market.
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