ZTE Foresees Massive Potential on Europe Mobile-Phone Renewal

April 16 (Bloomberg) -- ZTE Corp., China s second-biggest maker of phone equipment, aims to expand market share in Europe as the region s mobile-network operators add technology and gain access to more frequencies.

Last year revenue grew by 12 percent in Europe, where the potential is massive, Zhigang Zhang, vice president for ZTE in Europe and North America, said yesterday at a briefing in Dusseldorf, Germany. We laid a good foundation and will grow stronger this year.

Royal KPN NV, the largest Dutch phone company, chose ZTE in December to upgrade and expand mobile networks in Belgium and at its E-Plus unit in Germany. Shenzhen-based ZTE is winning more network-infrastructure orders in Europe, Zhang said, adding that the company is already working in an undisclosed neighboring country. The customer will announce a contract soon, he said.

ZTE had 7.5 percent of the global market by revenue for carriers network equipment last year, according to Zhang. Its sales jumped by 36 percent, and Huawei Technologies Co., ZTE s larger competitor at home, was the only other company in the industry to report revenue growth, he said.

Ericsson AB, the world s largest phone-equipment maker, posted a 3.5 percent decline in sales to networks last year. Alcatel-Lucent s network-equipment revenue fell 11 percent and Nokia Siemens Networks sales dropped 18 percent.

Revenue Abroad

ZTE gets almost half its revenue from outside China. Customers in Germany include Telefonica SA s o2, E-Plus, Deutsche Telekom AG and Vodafone Group PLC, the country s four mobile-phone operators. ZTE has a global contract for network equipment with Vodafone that is managed out of Germany. Customers in other markets include Sprint Nextel Corp., the third-largest mobile operator in the U.S., Telstra Corp. Ltd. in Australia and Singapore Telecommunications Ltd.

Mobile operators in Germany are bidding in the country s largest frequency auction to date. Zhang said he s hopeful the company can win contracts to build the infrastructure for the 800-MHz frequencies that became free when television broadcasters switched to digital from analogue transmitting.

Operators that secure frequencies in the 800-MHz band must, under the terms of the auction, commit to building networks covering 90 percent of rural areas, or white spots, before they can use the frequencies in more densely populated areas.

German Prospects

We want to be there for the build-out, which would probably entail a couple of thousand base stations across Germany, and may involve contracts for ZTE from at least one or two of the operators, Zhang said.

ZTE doesn t foresee potential soon for equipment orders for higher frequencies that are for sale, as operators upgrade existing third-generation, or 3G, systems before adopting newer, long-term evolution, wireless technology, Zhang said. Infrastructure being built now can be upgraded to LTE when the time comes because it s a question of software and not network equipment, Zhang added.

LTE still has some way to go, Zhang said. I m not sure that s so high on the operators priority lists. The potential to improve 3G is not exhausted yet. April 16 (Bloomberg) -- ZTE Corp., China s second-biggest maker of phone equipment, aims to expand market share in Europe as the region s mobile-network operators add technology and gain access to more frequencies.
Last year revenue grew by 12 percent in Europe, where the potential is massive, Zhigang Zhang, vice president for ZTE in Europe and North America, said yesterday at a briefing in Dusseldorf, Germany. We laid a good foundation and will grow stronger this year.
Royal KPN NV, the largest Dutch phone company, chose ZTE in December to upgrade and expand mobile networks in Belgium and at its E-Plus unit in Germany. Shenzhen-based ZTE is winning more network-infrastructure orders in Europe, Zhang said, adding that the company is already working in an undisclosed neighboring country. The customer will announce a contract soon, he said.
ZTE had 7.5 percent of the global market by revenue for carriers network equipment last year, according to Zhang. Its sales jumped by 36 percent, and Huawei Technologies Co., ZTE s larger competitor at home, was the only other company in the industry to report revenue growth, he said.
Ericsson AB, the world s largest phone-equipment maker, posted a 3.5 percent decline in sales to networks last year. Alcatel-Lucent s network-equipment revenue fell 11 percent and Nokia Siemens Networks sales dropped 18 percent.
Revenue Abroad
ZTE gets almost half its revenue from outside China. Customers in Germany include Telefonica SA s o2, E-Plus, Deutsche Telekom AG and Vodafone Group PLC, the country s four mobile-phone operators. ZTE has a global contract for network equipment with Vodafone that is managed out of Germany. Customers in other markets include Sprint Nextel Corp., the third-largest mobile operator in the U.S., Telstra Corp. Ltd. in Australia and Singapore Telecommunications Ltd.
Mobile operators in Germany are bidding in the country s largest frequency auction to date. Zhang said he s hopeful the company can win contracts to build the infrastructure for the 800-MHz frequencies that became free when television broadcasters switched to digital from analogue transmitting.
Operators that secure frequencies in the 800-MHz band must, under the terms of the auction, commit to building networks covering 90 percent of rural areas, or white spots, before they can use the frequencies in more densely populated areas.
German Prospects
We want to be there for the build-out, which would probably entail a couple of thousand base stations across Germany, and may involve contracts for ZTE from at least one or two of the operators, Zhang said.
ZTE doesn t foresee potential soon for equipment orders for higher frequencies that are for sale, as operators upgrade existing third-generation, or 3G, systems before adopting newer, long-term evolution, wireless technology, Zhang said. Infrastructure being built now can be upgraded to LTE when the time comes because it s a question of software and not network equipment, Zhang added.
LTE still has some way to go, Zhang said. I m not sure that s so high on the operators priority lists. The potential to improve 3G is not exhausted yet.

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