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  1. #1
    Mid
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    Huawei surprised by multi-million dollar Thai penalty

    Huawei surprised by multi-million dollar Thai penalty

    05/09/2007 12:54:00 - by CommsDay




    Huawei says it is surprised by the threat of a massive financial penalty for missing deadlines in supplying a CDMA system to CAT Telecom in Thailand. The vendor reportedly faces a penalty of up to 20 billion Thai baht (US$619 million), nearly three times the value of the 7 billion baht contract.

    A Huawei spokesperson said the dispute was over the delay in completing an upgrade to cdma2000 EV-DO Rev A. The main contract for a nationwide CDMA system had been completed on schedule and the network was fully operational, he said.

    All base stations were installed within the stipulated contract period, passing CAT’s primary acceptance certification, he said. The dispute involved the provision of an additional free upgrade from CDMA 2000 EV-DO Revision 0 to Revision A, he said.

    There are discrepancies in the contract relating to the delivery schedule of the complimentary update. This update has no impact on the ongoing operations of the current CDMA network, he said. Huawei is surprised by recent media reports that CAT will levy a substantive fine on the company.
    Huawei has not received any notification from CAT in relation this matter. A company statement said the two firms were in a continuing dialogue towards resolving this matter.

    The Bangkok Post said CAT had been unhappy about the timing and quality of Huawei’s deliveries all the way through the project. Under terms of the contract the Thai carrier had the right to impose a penalty of 90 million baht a day for late delivery. It would reveal the size of the penalty on 11 September, the Post said.

    web20.telecomtv.com

  2. #2
    watterinja
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    Sounds like a typical Chinese-type way of doing business. Wait until the major portion has been completed, find a small fault, kick up a stink & then refuse to pay the outstanding payment. In this case, the Thais merely extended the principle to making money from something they were purchasing.

    Pretty odd!!!

  3. #3
    I am in Jail

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    Huawei makes a point of bidding under everybody else to win the business. Later, after the extent of quality of the equipment and service problems, operators usually end up going back to reliable vendors after being burned a few times. They ripped off Cisco for some major technology, and China told Cisco drop its lawsuit or never sell another dollar of equipment in China again.

    Nothing they do surpises me.

  4. #4
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    Quote Originally Posted by watterinja View Post
    Sounds like a typical Chinese-type way of doing business. Wait until the major portion has been completed, find a small fault, kick up a stink & then refuse to pay the outstanding payment. In this case, the Thais merely extended the principle to making money from something they were purchasing.

    Pretty odd!!!
    Sounds like there was a penalty clause in the contract and when Huawei failed to deliver what they'd contracted to deliver CAT invoked the clause. Looks like pretty standard business procedure to me.

  5. #5
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    If you're dumb enough to do business with a Chinky company, what do you expect?

  6. #6
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    ^True. BTW British Telecom did a massive deal with Huawei to replace their network infrastructure but the UK government told them to push off. Still, most of the giant Telcos are using Huawei now, they're a big, big company, come from nothing in just a few years by stealing other companies technologies and reselling at half price as the Chinese do regularly. On a semi-related note we had Huawei here a few months trying to sell us their equipment, everytime I said the word "Huawei" my Thai staff cracked up laughing. Took me a while to figure out what was wrong with my accent.
    Last edited by DrB0b; 06-09-2007 at 12:34 PM.

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