China Telecom Awards CDMA Equipment Contracts
Southern Metropolitan News, 10/15/08
China Telecom's (NYSE: CHA; 0728.HK) bidding results for CDMA network equipment for over 300 cities have been quietly settled. Contracts with equipment manufacturers have been completed and signed, and deliveries are set to begin.
Informed sources say that Huawei won a 25%-26% share in the bidding, ZTE (0763.HK; 000063.SZ) a 22%-23% share and Alcatel-Lucent a 17% share. Motorola came in fourth position. In 2007, ZTE took 32% of the Chinese CDMA equipment market, Motorola 23%, Alcatel-Lucent 22%, Nortel 17% and Huawei less than 3%.
Although China Telecom initially announced RMB 27 bln in CDMA network equipment contracts, in reality the final sum will not exceed RMB 10 bln. Ultra-low prices offered by Huawei in a successful bid for base stations and core network equipment amounted to only between RMB 400 mln and RMB 500 mln, showing that Huawei is clearly betting on future expansion and service opportunities. ZTE's total bid also amounted to only approximately RMB 2 bln.
Editor's Note: For more background on this current round of bidding, please see "Rumor: China Telecom to Combine First and Second Round Bidding", MD 10/07/08 issue.
Keywords: mobile network equipment network construction 000063.SZ 0728.HK 0763.HK Alcatel-Lucent bidding CDMA CHA China Telecom Huawei market share Motorola Nortel wireless ZTE base station
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