Rumor: China Telecom to Combine First and Second Round Bidding
Southern Metropolitan News, 10/07/08
An informed source claims that China Telecom (NYSE: CHA; 0728.HK) will combine its first and second stage bidding for CDMA equipment into a single bid. The company has already basically made its decision on the bids equipment manufacturers made in mid- and late September. According to the overall results, ZTE (0763.HK; 000063.SZ) and Huawei are in first and second place respectively. Huawei scored contracts for multiple provincial capitals and other core cities. ZTE has received orders from 100 cities, with most concentrated in Central and Western China. China Telecom is expected to announce the final results of the bid at the end of the month.
The second stage of bidding will focus on non-core cities, and so competition between manufacturers is not expected to be as fierce as in the first round. The source claims that because the first stage of the bid has already pushed prices low everywhere, pricing will be absolutely critical in the second stage.
Meanwhile, other sources in the industry have revealed that after using extremely low prices to win wireless and core network equipment contracts in several cities in Guangdong, some manufacturers have requested RMB 200 mln from provincial telecommunication operators as expenses for the removal of previously installed networking equipment.
Editor's Note: For more information about the bidding, please see "Rumor: CDMA Bidding Results Finalized", MD 9/22/08 issue.
Keywords: mobile network equipment 000063.SZ 0728.HK 0763.HK bidding CDMA CHA China Telecom Huawei wireless ZTE supply contract
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