CHINA'S Huawei Technologies is in talks with Gulf telcos Etisalat and Saudi Telecom to manage their fixed-line networks, an executive said, potentially cementing its leadership of a US$1 billion regional industry.

Huawei, the world's No. 2 telecom gear maker, is in similar talks with several other Middle East operators, the executive said in e-mailed comments, but declined to name them, citing confidentiality agreements.

"Huawei has strong partnerships with most regional operators and is constantly looking into ways of expanding these," said Xia Chaojie, vice-president for delivery and service, Huawei Middle East.

"We see an opportunity to do this through moving towards new technologies and also looking at fixed-line managed services. Our teams have initiated talks with all our fixed network partners in the Middle East, including operators like Saudi Telecom and Etisalat."

Etisalat is a former monopoly in the United Arab Emirates, while managed services refer to telcos outsourcing network maintenance to a third party.

The practice is very common in the Middle East, allowing operators to better focus on marketing and customer services to differentiate themselves from competitors.

Outsourcing network maintenance also typically cuts telcos' operating costs by 13 to 20 percent, Xia said.

He estimated the Middle East's managed services sector was worth US$1 billion last year, claiming Huawei's market share was 55 percent. He forecast sector revenue would grow 18 percent over the next two to three years.

"In the Gulf we are providing or have provided managed services tie-ups with almost all of the major operators," he said.

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