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ZTE Confirms Alcatel Deal

CANNES, France -- 3GSM Congress – Chinese equipment maker ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) today confirmed it has struck an OEM deal with Alcatel (NYSE: ALA; Paris: CGEP:PA) for the supply of CDMA network equipment, a tieup initially reported by Unstrung earlier this month (see ZTE Preps European Deal).

ZTE is to integrate its CDMA radio access kit into Alcatel’s core network product offering. The agreement covers all CDMA technologies, including 1x RTT, EV-DO, EV-DV, and CDMA 450 (see ZTE, Alcatel Sign OEM).

Financial details were not disclosed, and both companies declined to comment on previous reports suggesting a price tag of approximately $500 million.

“Today is Valentines Day and we have successfully made two companies fall in love,” quipped ZTE spokesman Cheng Lin at a press conference on the French Riviera today [ed. note: Blurrrgh].

The deal gives ZTE an added opportunity to reach its goal of generating 40 percent of its revenues from international sales by 2006, while Alcatel benefits from a strengthened network equipment portfolio (see ZTE: Set for Overseas Explosion).

“We believe we can now make the step to bring all kinds of broadband technologies to customers,” said Alcatel’s senior VP & general manager, Broadband Wireless Division, Sylvie Richir. “We believe a combination of the ZTE radio network and Alcatel core will make for a very effective solution in the CDMA market. This allows Alcatel to deliver all types of broadband: DSL, EDGE, W-CDMA, WiMax, and now radio access CDMA.”

Richir revealed the French vendor also has its eyes fixed firmly on the burgeoning European CDMA 450 market (see CDMA 450 Seeps Into Europe). “The deal covers the entire frequency range of the CDMA portfolio, but we think some of the first contracts we will win with this deal are 450 contracts in the Eastern European space.”

— Justin Springham, Senior Editor, Europe, Unstrung

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