NSN, ZTE Bag 3G Deals in India

In the cutthroat competition for 3G equipment deals in India, Nokia Networks and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) announced today that they have each won a contract to supply 3G gear to Aircel Ltd.

ZTE said that it will provide software-defined radio 3G equipment and upgrade Aircel's GSM network in a deal worth US$85 million. The deal is believed to be for just one of the 13 circles (service areas) in which Aircel holds a 3G license. (See ZTE Wins $85M 3G Deal in India .)

Meanwhile, NSN said it will supply 3G equipment and Service Provider Information Technology (SPIT) systems in three circles (service areas) -- Punjab, Kolkata, and rest of West Bengal -- as well as operate and manage Aircel's 3G network in those circles for four years.

Why this matters
For ZTE, the Aircel deal is important because the Chinese vendor only has one other 3G customer in India -- Reliance Communications Ltd. In fact, initial reports from India suggested that Reliance was ZTE's only 3G success.

Also, ZTE is an incumbent GSM supplier to Aircel, so it was critical for the vendor to retain Aircel as a customer as it rolls out its new 3G network.

However, it appears ZTE has the smallest share of Aircel's 3G contract awards, as Ericsson AB (Nasdaq: ERIC) won a deal for six circles, while both NSN and Huawei Technologies Co. Ltd. have been handed business in three circles apiece. (See Aircel Preps 3G Vendor News and Aircel Seals 3G Vendor Deals .)

While the Aircel deal is a boost for ZTE, the vendor trails some way behind India's 3G vendor market leaders Ericsson, Huawei, and NSN. (See Ericsson's India Crown Under Threat.)

For more
The Indian 3G market is currently one of the most fiercely contested telecom vendor battlegrounds. For more on how the market is shaping up, see the following stories:

— Michelle Donegan, European Editor, Light Reading Mobile