UPDATE 1-ZTE says wins 34 pct of China Mobile network deal

Wed Jul 15, 2009 12:48am EDT

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(Changes attribution to ZTE, adds quotes)

HONG KONG, July 15 (Reuters) - ZTE Corp (0763.HK) said on Wednesday it had won 34 percent of China Mobile Communications Corp's (0941.HK) third-round 3G network expansion tender.

The Shenzhen-based company said it had won the largest share of the bidding, which was two-thirds complete, and the remainder of the tender -- worth 8.6 billion yuan ($1.26 billion), according to media -- would be finalised in August.

"ZTE has got 34 percent (of the tender) so far and we're confident of getting 36 percent or more," Isaac Liang, the director of TD-SCDMA for ZTE, told Reuters, saying China Mobile had ranked the firm first in terms of technology and service.

The tender is a part of a rollout of 3G networks that will total $58.5 billion through 2011 by China Mobile and smaller rivals China Telecom (CHA.N) (0728.HK) and China Unicom (0762.HK).

ZTE garnered about 36 percent of the contracts up for grabs over the first two rounds of China Mobile's tender for its third-generation network covering 200 mainland cities.

Huawei Technologies [HWT.UL] won 22 percent of the contracts in the third round, while Datang Mobile Communications Equipment and domestic partner FibreHome Technologies grabbed 21 percent, according to the South China Morning Post (SCMP), with Nokia Siemens Networks [NOKI.UL] and Ericsson among the other winners.

China Mobile, the world's largest mobile service provider by users, holds the sole government licence to develop and operate the nation's homegrown TD-SCDMA technology.

"Vendors with a self-developed capability in TD-SCDMA technology scored higher marks in all three phases of TD-SCDMA tenders," 3TelConsulting, a mainland telecommunications industry research firm, was quoted by the SCMP as saying.

ZTE and Huawei were helped by their offers of a free upgrade of China Mobile's existing TD-SCDMA equipment, the report said, quoting analysts.

ZTE, the world's sixth-largest cellphone maker, has said it aims to become one of the top three vendors in five years, although analysts expect the cellphone market to have its toughest year ever in 2009, with sales volumes shrinking 10 percent or more. ($1=6.832 Yuan) (Reporting by Nerilyn Tenorio and Joanne Chiu; Writing by Kirby Chien; Editing by Jonathan Hopfner)

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