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ZTE wins €200m contract from Telenor

23 августа 2010

ZTE, the telecoms equipment maker, has won a €200m ($254m) contract to build a mobile network for Telenor, further establishing the Chinese company as a key supplier to top-tier European telecoms operators.

In an interview with the Financial Times, Shi Lirong, ZTE chief executive, said his company had made a breakthrough in the European market this year.

“Virtually all European operators have shortlisted us now ... That has happened over the course of this year,” Mr Shi said.

Under an agreement to be announced on Monday, ZTE will build a mobile network for as many as 4.5m users for Telenor in Hungary.

By winning this European business, ZTE is following in the footsteps of Huawei, which last year ranked second among global network equipment vendors.

It underscores the growing strength of Chinese participants in spite of efforts in the US and other countries to limit market access on national security grounds.

With $9bn in revenues last year, ZTE is the seventh-largest network equipment maker, but trails far behind Huawei, which had $22bn in revenues in 2009.

But ZTE matched Huawei in achieving double-digit growth last year at a time when most telecoms equipment vendors were experiencing a drop in revenue.

In the first half of this year, about one-fifth of ZTE’s revenue came from mature markets, mostly Europe since it has little US business, compared with 16 per cent last year.

ZTE said it expected several other large contracts from European operators to come through over the next couple of months.

Anders Jensen, chief executive of Telenor Hungary, said ZTE won the contract because it offered the lowest total cost of ownership, allowing Telenor to run its services more efficiently.

He added that competition among equipment vendors was hotting up, with companies starting to fight price wars.

The Hungary contract follows ZTE’s deployment of a Wimax network for Telefónica in Spain and the building and upgrading of mobile networks for KPN, the Dutch operator, and other Telenor affiliates.

“The European operators would start working with us on smaller projects, and sometimes with contracts in markets outside Europe. This is a process,” Mr Shi said.

ZTE began courting European carriers several years ago by supplying customised handsets.

Mr Shi said his company was seeing the fruits of this effort as operators had gained enough understanding and trust to order core infrastructure.

He said ZTE was applying the same strategy in the US, but was at a nascent stage.

The company’s fast gains in Europe follow several years of strong sales in emerging markets.

However, analysts said Huawei’s persisting difficulties in penetrating the US market do not bode well for ZTE’s hopes of making inroads in a market where national security concerns have held Chinese vendors back.

Источник: Financial Times

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