Huawei Seals Russian WiMax Deal

NOON -- Huawei Technologies Co. Ltd. has landed a contract to supply equipment to Russia's newest WiMax operator in a deal that comes with a $100 million loan from Chinese banks. (See Huawei, ZTE Strike New Funding Deals.)

News of Russia's new WiMax startup comes from Icon Private Equity , which just announced that it will invest $200 million in the operator to roll out wireless broadband throughout Russia. The new operator has a license in the 3.5 GHz frequency band and will operate under the brand name Freshtel.

Additional funding for the network deployment will come by way of a loan from Chinese financial institutions, according to Icon. An Icon spokeswoman tells Unstrung the loan will be $100 million.

Icon has also invested $100 million in the Ukranian WiMax operator, UHT, which will take on the Freshtel brand later this summer, according to an Icon spokeswoman.

Freshtel's CEO is former JSC Vimpel-Communications (VimpelCom) (NYSE: VIP) exec Sergei Avdeev, and he will have responsibility for the Russian and Ukrainian operations.

For Huawei, the deal adds to the momentum the vendor claims it has in WiMax. The company recently said that it expected Wimax revenues to double from $500 million in 2009 to $1 billion in 2010. (See Huawei Rakes In WiMax Sales.)

According to Icon's spokeswoman, the additional financing from Chinese banks was not a factor in the decision to select Huawei. "There is no funding so far… The money is there if we need it for further network rollout," she says.

Icon says Freshtel's goal is to have network coverage for 20 million people by the end of this year. The operator will launch commercial service in October, according to the spokeswoman.

Russia is hot for WiMax. And it's the first market where High Tech Computer Corp. (HTC) (Taiwan: 2498) will launch its WiMax smartphone. (See Cisco Chalks Up WiMax Wins, HTC Intros WiMax'd Smartphone, Russia's WiMax Phone, Scartel Launches WiMax, and Russian Into WiMax.)

— Michelle Donegan, European Editor, Unstrung