China's No 2 telecom equipment maker ZTE Corp has signed a co-operation deal with France Telecom, as part of its drive to expand into the European market.

The pact comes soon after a global supply deal between Chinese top telecom equipment maker Huawei Technologies and the world's largest mobile operator Vodafone, clinched this November.

Such partnerships underline global major telecom operators' increasing favour for equipment and solutions made by Huawei and ZTE.

ZTE and France Telecom, the world's sixth largest telecom carrier and European No 2 mobile operator and Internet access service provider, will work together on research and development (R&D) in the telecom sector.

The co-operation with France Telecom "has strengthened ZTE's strategic position and competitiveness in the European market and will help ZTE to better understand European customers' demands," said Yin Yimin, president of Shenzhen-based ZTE.

Huawei and ZTE in recent years have experienced large overseas sales growth by snatching deals from established global giants such as Ericsson, Nokia, Siemens and Alcatel.

Most of their overseas sales have up until now come from developing countries so the proven track record that exists in developed countries ensures a higher chance of success for the Chinese technology makers.

ZTE, which has been supplying France Telecom with some broadband data communications products, said the French operator has finished a 3G (third generation) mobile telecom equipment supply qualification process for ZTE.

ZTE will establish a technical training centre in Europe for France Telecom and ZTE's other European customers.

In December, Huawei won a contract from Dutch carrier Telfort to build a 3G mobile communications network in the Netherlands, beating the world's largest mobile telecom equipment maker Ericsson.

The firm in April became one of eight preferred suppliers for Britain's BT Group for a US$20 billion network.

And last month it became an approved supplier for Vodafone's sprawling operations worldwide.

The short-listing is a sign that global top-tier telecom operators are increasingly recognizing Chinese manufacturers' technological strength, said Chris Han, an analyst with Norson Telecom Consulting.

Previously, Chinese manufacturers were stereotyped as makers of low-cost and low-tech goods.

"It is no surprise that Huawei and ZTE, thanks to a combination of their aggressive R&D efforts and cost advantages, are becoming more and more popular with leading global operators," said Han.

Privately-held Huawei last year recorded 46.2 billion yuan (US$5.78 billion) in contract sales, 41 per cent of which were from overseas.

The firm's overseas sales in the first half of this year already exceeded its revenues generated from the domestic market.

Shanghai-listed ZTE's un-audited revenues in the first half of this year hit 10.303 billion yuan (US$1.29 billion).

Its overseas turnover surged by 130.88 per cent in the period, accounting for 30.5 per cent of the total revenues.

Source: China Daily 12/09/2005 page11