Mobile telco O2 has outsourced core network planning and implementation to Chinese telecommunications equipment and services provider Huawei.

Under the five year deal, 56 permanent roles will transfer to the Chinese company under TUPE laws, and 62 contractors will also be moved.

It is Huawei’s first major managed services contract win in the UK. A spokesperson for Huawei told Information Age that the O2 staff that will move to Huawei will form the basis of a core network planning and implementation managed services capability in the UK.

Huawei has made a concerted push to establish itself in the UK market in recent years.

In 2010, it opened a security testing centre in Oxfordshire to certify its products for use in national critical infrastructure, and in 2011 appointed former UK government CIO John Suffolk as its chief information security officer.  Huawei also appointed Sir Andrew Cahn, former chairman of UK Trade & Industry, to its advisory board.

In January 2012, it acquired the Centre for Integrated Photonics, a research lab based in Ispwich’s Adastral Park.

In March, it announced a partnership with energy meter manufacturer Landis+Gyr to develop a "universal communications hub" for smart meter implementations, with the initial goal of targetting the UK’s smart meter roll-out.
 
In the US, however, Huawei’s progress has been hampered by security concerns. US-based acquisitions and contract wins have been blocked due to the company’s alleged links to the People’s Liberation Army in China – links Huawei firmly denies.

Last week, O2 reported a 6% decline in first-quarter revenues, down €1.7 billion, and 33% drop in profits to €334 million. The company experienced a steep decline in voice traffic and reveneus, for which a gradual rise in data services revenue failed to compensate.