ZTE: Future WiMax Hero?

Chinese equipment vendor ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) is ramping up efforts in the emerging WiMax sector, backed by analyst opinion that the company has the potential to be a dominant market force.

Speaking at the London leg of its European roadshow today, ZTE was keen to talk up its plans to develop technology based on both the fixed-wireless 802.16d standard and the future 802.16e mobile version.

The company has set up a subsidiary that focuses specifically on WiMax equipment -- dubbed “ZiMax Technologies” [ed. note: Groooaaannnn!!!] -- and has development centers in San Diego in the U.S. and Shanghai and Shenzhen in China.

According to James Peroulas, senior engineer at ZTE, the vendor has already deployed its “802.16d-like” equipment in unnamed carrier trials in China, and will be ready to offer official fixed-wireless WiMax equipment once products are certified by the WiMAX Forum later this quarter.

As for mobile WiMax equipment, Peroulas envisages an October 2006 timeframe for a “commercial trial system” and expects to have full commercial systems up and running by June 2007.

“We see WiMax as a very big opportunity,” states Peroulas. The company claims to have been involved in the technology since 2002, was a founding member of the WiMax Forum, and is one of only five board members.

Earlier this year ZTE tapped Fujitsu Ltd. (Tokyo: 6702; London: FUJ) and Intel Corp. (Nasdaq: INTC) as suppliers of silicon for its WiMax base station and CPE kit (see Intel Maxes With ZTE and Fujitsu Goes WiMax Nuts).

Analysts believe the company is well placed to strike it gold in the 802.16 market. “ZTE is widely expected to be among the first vendors to offer a WiMax-certified product, and given its position as a vendor of WLL [Wireless Local Loop] systems in China and other developing markets, ZTE could turn out to be the major force in Fixed WiMax,” writes Gabriel Brown in the latest Unstrung Insider.

— Justin Springham, Senior Editor, Europe, Unstrung