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Networks & Infrastructure
China’s ZTE Corp wins CDMA order with U.S. telco start-up
Customer win furthers the vendor’s growing global presence
by Ek Heng, Asia-Pacific Correspondent
Capping its worldwide winning streak, China-based telecom vendor ZTE’s U.S. subsidiary, ZTE USA Inc., has been selected as the key supplier of CDMA infrastructure and devices by U.S.-based Smart PCS when it launches its service.
No value was announced but the comprehensive order covering network infrastructure and data cards through to handsets testify to the extensive capabilities of ZTE as an integrated telecommunication equipment and network solution supplier.
An unlimited no contract pre-paid carrier, Smart PCS said in a statement that it needed a vendor that offers mature, state-of-the-art equipment and devices with affordable price points. It added that the new network will use an all-IP CDMA 2000 EV-DO switching equipment and base stations initially covering the Georgia and Tennessee regions with a growth path for expansion elsewhere in the U.S. Besides power consumption efficiency, the all-IP equipment allows Smart PCS to upgrade to next generation network without having to invest in a new base station.
“The network equipment has the scalability to support ongoing subscriber base growth as well as future technology upgrades and new market expansion,” said Smart PCS’s president and CEO, Anthony E Ortolani.
Broadening its reach
In addition to a series of domestic orders totalling hundreds of million dollars with locally restructured telcos, ZTE’s other recent successes include multi-million dollar wins with carriers in Ethiopia, India, Libya and Pakistan. These include a US$400 million agreement with Ethiopian Telecommunication Corporation, a US$400 million contract with India’s Aircel telco, a US$58 million contract with Libyana, Libya’s second largest state-owned telco, and a US$100 million deal for GSM network with CMPak telco in Pakistan.
ZTE’s success, however, should be seen not only in terms of its wide product scope or price competitiveness but also its technology capabilities. In the WiMAX arena, for example, ZTE has deployed more than 30 such networks worldwide as of August 2008 and its employees are actively involved in many international bodies developing emerging telecom standards.
Making up for a case of "you name it, we have it," ZTE has manufacturing interests in fixed, mobile, data and optical networks as well as intelligent networks and next generation networks, and mobile handsets. It has also demonstrated its ability to ramp up capacity to meet market needs. For example, the company produces more than 50 types of mobile devices annually for GSM, CDMA, W-CDMA, TD-SCDMA systems to customers in over 100 countries. From 15 million units shipped in 2006, it is on track to produce 50 million handsets and six million 3G USB modems for notebook PCs by end 2008.
Based in Shenzhen, China, ZTE has extensive investments in production and R&D facilities not only in China but also across several countries including the USA, France, India and Pakistan. It owes its success partly to a strategy to transfer technology and locate manufacturing plants to new markets which led to the decision in September 2008 to set up a US$5.2 million factory in Ethiopia, the country’s first mobile phone assembly plant.
As with any international operations, ZTE has had its share of problems. A large landline broadband contract with the Philippines was cancelled earlier this year over an alleged corruption scandal which the company denied. In October 2008, Telenor announced it was banning ZTE from tenders for up to six months for breach of ethics which was attributed to an employee of ZTE.
Among others, a report by international research firm IDC cites ZTE as the fastest growing telecom equipment and solutions provider. ZTE aspires to achieve US$10 billion turnover by end 2008 and it commits 10 percent of its annual volume to R&D. Apart from having one third of its workforce in R&D, the priority it places in breaking new technology frontiers is underscored in an October announcement of a new US$880 million R&D center in Xian, China.
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