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ZTE, Huawei increase their competition
11/4/2005 17:06

Jane Chen / Shanghai Daily news

Amid the tough competition in China's telecommunications market, the country's two leading telecom equipment suppliers are expanding their battlefields to the South Asia overseas markets.
ZTE Corp, China's biggest publicly traded telecom manufacturer, has acquired some major contracts from Bangladeshi telecom operators, a fruit of Premier Wen Jiabao's ongoing four-nation South Asia tour. Its key rival, Huawei Technologies Co Ltd, announced it has also pocketed two contracts there during Wen's visit. The deals are valued at a combined US$200 million, for GSM and CDMA network equipment, today's China Business News newspaper reported.

Wen arrived in Dhaka, capital of Bangladesh, on Thursday to start the second leg of his South Asia tour. Senior executives from both ZTE and Huawei are members of Wen's delegation. The country, which is home to 130 million people but which has a local telecom sector that is underdeveloped, has attracted the Chinese firms because of its potential, analysts pointed out.
Citing a source close to ZTE, the China Business News report said ZTE's contracts include a 200,000-line CDMA equipment contract for Worldtel Ltd, a UK-based international telecom operator in Bangladesh, a 120,000-line CDMA2000-based network for Bangladesh's GEP Telecom Limited to help it expand coverage of its mobile telecom network and a 100,000-unit CDMA2000-based network equipment for the country's Jalalabad Telecom Limited (JTL).
But the values of these contracts are not revealed in the report.
The anonymous ZTE source regards the contracts as milestones for ZTE in Bangladesh, and expects the next target to be India, where Premier Wen is currently on tour. Wen arrived in Bangalore on Saturday on a four-day visit to India, the last leg of this South Asia tour.
ZTE and Huawei both announced new developments in India at the end of last month.  ZTE announced its wholly-owned telecom equipment manufacturing plant in India, also the first of its kind there wholly owned by Chinese firms, has started formal operations to supply India and its neighboring countries.
Shortly after that, Huawei announced a plan to invest US$100 million to set up a manufacturing plant in India.  The plant is expected to start operation in two years, mainly catering to the Indian market. 
Huawei has already established a software development center in India.
Prior to India and Bangladesh, Pakistan, the first stop of Wen's South Asia tour, has already witnessed the fierce competition between ZTE and Huawei.
Only three days ago, ZTE signed more than 10 contracts with the Pakistan government, including a US$350 million valued research and development center.  Upon completion, the center will be ZTE's most important R&D and manufacturing center in South Asia, as well as a technical training center for its employees and customers in the area.
At the same time, Huawei has snatched up two contracts in Pakistan, including a US$160 agreement with the country's largest telecom operator and a US$60 million deal, said its spokesperson Fu Jun.  Details of the deals have not been released.