ZTE Unveils New 'Western' Division

Chinese vendor ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) has provided some further details of its recently formed new international division mentioned fleetingly by the company in late April as it announced its first-quarter numbers. (See ZTE Readies Fresh Assault on Europe, US.)

In response to questions from Light Reading, ZTE says it restructured its international operations at the beginning of this year, creating a single organization, dubbed Division IV, to focus on Europe and the U.S., "acknowledging the similarities of the key Western markets."

The division, based in Paris, will be run by senior vice president Zhu Jinyun, who was previously head of ZTE's Wireless products division. ZTE says Zhu gained "rich management experience" as the general manager of ZTE's CDMA product line from 2002 to 2007, after which he was appointed general manager of the vendor's UMTS product line.

ZTE says the new division, which has a "greater emphasis on infrastructure," will build on the relationships the Chinese company has already developed with the likes of BT Group plc (NYSE: BT; London: BTA), Deutsche Telekom AG (NYSE: DT), Orange (NYSE: FTE), French carrier SFR , and Vodafone Group plc (NYSE: VOD). (See T-Mobile Picks ZTE, and Vodafone Puts ZTE in the Frame, and FT, ZTE Team on R&D .)

"Now [ZTE] moves forward to the next stage of its development in Europe," states the vendor. "Expect the first major network contracts in 2009."

ZTE has no shortage of infrastructure offerings to pitch to operators the world over: It recently outlined its R&D focus areas and secured $15 billion in credit to fund international expansion. (See ZTE Secures $15B, Highlights R&D.)

ZTE has certainly been active in Europe for the past five-plus years, but has never had the breadth of success that its Chinese rival, Huawei Technologies Co. Ltd. , has managed. The move appears to be an attempt to become a bigger hitter in the mature markets of Western Europe and the U.S., where the likes of Alcatel-Lucent (NYSE: ALU), Ericsson AB (Nasdaq: ERIC), and Nokia Networks dominate the traditional telecom infrastructure sector.

Huawei has managed to establish itself as one of the leading contenders for infrastructure business in Western Europe but has yet to make the big time in North America, though it is also trying its hardest to break into that lucrative market. (See Huawei Closes In on Rivals, Huawei Reports 2008 Revenues of $18.3B, Huawei Steps Up in North America, and Is Huawei Moving Closer to Nortel?)

— Ray Le Maistre, International News Editor, Light Reading