Light Reading
Cut-price deal gives ZTE a breakthrough in Europe as Dutch incumbent expands and upgrades its 3G networks in Belgium and Germany

ZTE Scores Euro 3G Deal With KPN

Ray Le Maistre
LR Mobile News Analysis
Ray Le Maistre, Editor-in-chief
12/23/2009
50%
50%

A combination of dogged persistence and low prices has netted ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) a 3G mobile infrastructure deal with European operator KPN Telecom NV (NYSE: KPN).

KPN is to expand and upgrade its networks in Belgium and Germany -- at KPN Group Belgium and E-Plus Mobilfunk GmbH -- with the Chinese vendor's HSPA (high-speed packet access) gear.

The deal is significant for ZTE, as the company has been striving to emulate rival Huawei Technologies Co. Ltd. by securing business with major European carriers in key markets. The company noted in October that it was seeking "to increase our presence in key markets such as Western Europe and North America while reinforcing our position in the 3G market at home," following the creation of a dedicated division to further its international ambitions. (See ZTE Rides High on Chinese 3G, ZTE Readies Fresh Assault on Europe, US, and ZTE Unveils New 'Western' Division.)

To date, ZTE has had limited success in Western Europe. Now it seems its strategy is starting to pay off -- but at what price? Financial details have not been revealed by either party.

What is known, though, is that KPN believes it has secured a good deal. The carrier noted in a short announcement Wednesday that the engagement with ZTE will "significantly accelerate the roll-out of KPN’s 3G networks in Germany and Belgium at significantly lower costs," and that the choice of ZTE is in line with the carrier's strategy of "focusing on Return On Capital Employed (ROCE)."

Put another way, KPN is looking for the cheapest deal it can find.

That operators are looking for the most cost-effective rollouts isn't new or surprising, but it is increasingly leading to decisions that might have been unthinkable only a few years ago. KPN's announcement comes only days after Ericsson AB (Nasdaq: ERIC) saw a home-turf LTE deal slip through its hands when Huawei was chosen for a nationwide, next-generation, mobile network rollout in Sweden. Ericsson noted on that occasion that it couldn't match the Chinese vendor's low prices. (See Huawei Beats Ericsson to Swedish LTE Deal.)

Ericsson is one of the companies that would have hoped to pick up this latest KPN business, as it's an existing 3G infrastructure supplier to KPN in the Netherlands as well as to E-Plus, having landed a contract with the German operator in March 2008. (See KPN Picks Ericsson for HSDPA.) Nokia Networks is also an E-Plus 3G network supplier. (See E-Plus Upgrades With NSN.)

And while it's not so unusual these days for the likes of Ericsson, NSN, and Alcatel-Lucent (NYSE: ALU) to lose out to their Chinese rivals for infrastructure deals, it's unusual for ZTE to be trumping Chinese rival Huawei for European business.

KPN had not responded to requests for further details about its 3G expansion as this article was published.

— Ray Le Maistre, International News Editor, Light Reading

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Huawei Video Resource Center
Dr. Dong Sun Talks About Carriers' Digital Transformation & Huawei’s Telco OS

1|29|15   |   6:28   |   (0) comments


Dr. Dong Sun, Chief Architect of Digital Transformation Solutions at Huawei, discusses how telecom operators can become digital ecosystem enablers and deliver optimal user experiences that are in real-time, on-demand, all-online, DIY and social (ROADS).
LRTV Huawei Video Resource Center
Huawei's Chief Network Architect Talks about Network Experience & Operators’ Strategies

1|29|15   |   3:39   |   (0) comments


In the digital age, network experience has become the primary productivity especially for telecom operators. In this video, Wenshuan Dang, Huawei’s Chief Network Architect, discusses how carriers can tackle the challenge of infrastructure complexity in order to enhance business agility and improve user experience.
LRTV Documentaries
The Rise of Virtual CPE

1|27|15   |   01:38   |   (4) comments


As NFV strategies evolve from tests and trials to production telco networks, expect to hear a lot about virtual CPE (customer premises equipment) rollouts during 2015.
LRTV Documentaries
Optical Is Hot in 2015

1|23|15   |   01:56   |   (2) comments


Optical comms technology underpins the whole communications sector and there are some really hot trends set for 2015.
LRTV Custom TV
Policy Control in the Fast Lane

1|22|15   |   2:57   |   (0) comments


What's making policy control strategic in 2015 and beyond? Amdocs talks with Heavy Reading's Graham Finnie about the key factors driving change in the data services landscape. Find out what his policy management research reveals about the road ahead for policy control – and sign up for
LRTV Documentaries
Highlights From the 2020 Vision Executive Summit

1|21|15   |   4:33   |   (2) comments


In December 2014, Light Reading brought together telecom executives in Reykjavik, Iceland to discuss their vision for high-capacity networks through the end of the decade. The intimate, interactive meeting was set against the backdrop of Iceland's spectacular natural beauty. As one of the event's founding sponsors, Cisco's Doug Webster shared his company's ...
LRTV Huawei Video Resource Center
Huawei Pay-TV Partner Harmonic, Helping Carriers Accelerate 4K Video Deployment with Huawei

1|20|15   |   5:42   |   (1) comment


At IBC, Peter Alexander, Senior Vice President & CMO at Harmonic, speaks about the growing interest in pay-TV service and its branching into multiple devices.
LRTV Huawei Video Resource Center
Sony Marketing Director Olivier Bovis Discusses the Outlook for 4K and Cooperation With Huawei at IBC 2014

1|20|15   |   6:50   |   (0) comments


At IBC, Olivier Bovis, Marketing Director of Sony, speaks about the coming of the 4K era.
LRTV Huawei Video Resource Center
Huawei Pay-TV Partner Envivio, Helping Carriers Accelerate 4K Video Deployment

1|20|15   |   2:57   |   (0) comments


At IBC, Olivier Bovis, Marketing Director of Sony, speaks about the coming of the 4K era.
LRTV Huawei Video Resource Center
Pay-TV's Networked Future

1|20|15   |   6:29   |   (0) comments


At IBC, Jeff Heynen, Principal Analyst at Infonetics, speaks about the future of the pay-TV industry and its transition.
LRTV Huawei Video Resource Center
Jeff Heynen: Distributed Access Will Help MSOs Compete in the Future

1|20|15   |   2:26   |   (0) comments


At IBC, Jeff Heynen, Principal Analyst at Infonetics, speaks about moving to distributed access and the future trend of cable business.
LRTV Interviews
Cisco Talks Transformation

1|20|15   |   13:02   |   (0) comments


In December 2014, Steve Saunders sat down with Cisco VP of Products & Solutions Marketing Doug Webster at Light Reading's 2020 Vision executive summit in Reykjavik, Iceland. They spoke about Cisco's approach to network virtualization as well as how service providers can begin to monetize high-capacity networks through the end of the decade.
Upcoming Live Events
February 5, 2015, Washington, DC
February 19, 2015, The Fairmont San Jose, San Jose, CA
March 17, 2015, The Cable Center, Denver, CO
April 14, 2015, The Westin Times Square, New York City, NY
May 12, 2015, Grand Hyatt, Denver, CO
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 8, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 9, 2015, Chicago, IL
September 9-10, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
November 11-12, 2015, The Westin Peachtree Plaza, Atlanta, GA
December 1, 2015, The Westin Times Square, New York City
December 2-3, 2015, The Westin Times Square, New York City
Infographics
Hot Topics
Google Continues Gigabit Expansion
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 1/27/2015
Cablevision's New WiFi Try – Freewheeling Enough?
Mari Silbey, Independent Technology Editor, 1/26/2015
Overture Builds on NFV Foundation
Mitch Wagner, West Coast Bureau Chief, Light Reading, 1/27/2015
LightSpeed Looks to Plug the Gigabit Gap
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 1/23/2015
Parks Predicts HBO OTT Success
Mari Silbey, Independent Technology Editor, 1/23/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Weekly Executive Interview
Join us live for Light Reading's interview with Jay Samit, the newly appointed CEO of publicly traded SeaChange International Inc. With a resume that includes Sony, EMI, Universal, Intel and Microsoft, Samit brings a reputation as an entrepreneur and a disruptor to his new role at the video solutions company. Hear what he has to say about the opportunities in video, as well as the outlook for cable, telco, OTT and mobile service providers.