China telecoms groups discuss Olympics deal

Huawei Technologies and ZTE, the leading Chinese telecommunications equipment makers, say they are in discussions to become sponsors of the 2008 Olympic Games in Beijing.

The rivals, well known in China but less so overseas, see the games as a chance to build their profiles internationally.

Chinese companies, eager to catch up with foreign competitors in brand recognition, are positioning themselves to make the most of the Olympics.

In March, Lenovo Group, the personal computer company, became the first Chinese company to enrol in the games worldwide sponsorship programme, putting it alongside the likes of General Electric, Samsung and McDonald s.

"We believe the Beijing Olympics is a good opportunity for us to promote our brand," said Shi Lirong, the ZTE director in charge of marketing.

There are different kinds of Olympic sponsorship, the most prized being The Olympic Partners programme. These sponsors get exclusive worldwide marketing rights, including permission to use Olympic symbols on their products.

Companies can also become sponsors by supplying equipment, although their marketing rights are more limited.

ZTE and Huawei, both based in the southern city of Shenzhen, are talking to the Beijing Olympic Committee about co-operation. Huawei said it was considering supplying equipment.

"Sponsorship may be very important, but through other ways you can also promote your brand," Mr Shi said.

ZTE, which has been more cautious in expanding overseas than Huawei, provided 16 stadiums at the Athens Games with broadband internet access through OTE, the Greek telecoms operator. It sent executives to Athens to observe how companies such as Visa and Coca-Cola used the event to promote their brands.

ZTE and Huawei, which recently entered the mobile handset market, have been stepping up promotion of their brands at industry conferences overseas and inviting potential customers to visit their headquarters in the hope of overcoming the view that Chinese companies can make only cheap, low-quality goods.

Overseas sales accounted for about 20 per cent of ZTE s $1.9bn ( 1.1bn) sales last year. The company plans an initial public offering in Hong Kong by the first half of next year.

Huawei hopes for international sales of $2bn this year, nearly half of its $5bn sales target for the group.