UPDATE 2-ZTE, Huawei win bulk of China Mobile's second batch of 4G contracts -sources

Thu May 22, 2014 9:20am EDT

(Adds quote from Ericsson, Nokia no comment)

By Yimou Lee and Lee Chyen Yee

HONG KONG/SINGAPORE May 22 (Reuters) - China Mobile Ltd has awarded its second batch of 4G telecom equipment contracts, with ZTE Corp and rival Huawei Technologies Ltd securing the bulk of the deal, two industry sources with direct knowledge of the situation said.

Telecom equipment makers, such as global leader Ericsson and Huawei, have been vying for a larger share of China Mobile's 4G tender in an industry that has been hit by lacklustre spending worldwide.

The company awarded ZTE and Huawei 34 percent and 31 percent of the batch, respectively, said the industry sources, who declined to be named as they were not authorised to speak to the media. ZTE and Huawei declined to comment when contacted by Reuters.

Ericsson and Alcatel-Lucent SA both won 9 percent of the batch, while Nokia secured 8 percent, the sources said.

Alcatel-Lucent confirmed that it was part of the award but declined to comment on the share allocation.

Ericsson said it could not comment on the report, adding: "We can confirm that the central parts of the negotiations are finalised. But there still are negotiations locally and that part is not finished yet." Nokia had no comment.

China Mobile, with more than 784 million mobile customers and 4.8 million 4G subscribers in April, is the world's largest telecoms company by subscribers.

It confirmed the names of the winners in a statement released later on Thursday, but did not provide details.

The current batch represents 40 percent - about 100,000 base stations in China - of China Mobile's quota of 4G contracts to be sold this year, the sources added.

The additional 60 percent of the contracts in the batch, about 160,000 base stations in China, will be decided later this year.

China Mobile chairman Xi Guo Hua said at the company's annual general meeting earlier on Thursday that the development of 4G had gone well so far and the company will build 500,000 base stations on the mainland this year.

($1 = 6.2337 Chinese Yuan) (Reporting By Chyen Yee Lee in SINGAPORE and Yimou Lee in HONG KONG; Additional reporting by Leila Abboud in Paris; Editing by Anne Marie Roantree, Keiron Henderson and Pravin Char)

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