ZTE normally accounts for a 30 percent share in China Unicom's CDMA network equipment tenders. It is expected to remain in a strong position with China Telecom.
Shanghai. July 17. INTERFAX-CHINA - ZTE Corp. and Huawei Technologies are likely to win the largest shares in the CDMA network equipment tender recently launched by China Telecommunications Corp. (China Telecom), which is acquiring China United Communications Corp.'s (China Unicom's) CDMA business, an analyst said on July 16.
"ZTE normally accounts for a 30 percent share in China Unicom's CDMA network equipment tenders. It is expected to remain in a strong position with China Telecom. Huawei also has a strong CDMA portfolio and is likely to secure a large share of the deal," Will Kong, an analyst from iSuppli Asia Ltd., told Interfax.
Alcatel Shanghai Bell, the Chinese subsidiary of Alcatel-Lucent, is also expected to join the bidding and secure part of the deal, he said. However, he was not optimistic about Nortel Networks' performance in the bidding. "Nortel's CDMA business in China has been declining," he said.
China Telecom opened a tender for CDMA network equipment several days ago, an official from ZTE, who wished to remain anonymous, told Interfax on July 16. He refused to reveal the total value of the tender. "The total amount depends on the final prices negotiated between the vendors and China Telecom," he said.
Oriental Morning Post said that the deal is worth approximately RMB 17.3 billion ($2.54 billion), citing an informed source. It also said that China Telecom is expected to invest between RMB 27 billion ($3.96 billion) to RMB 30 billion ($4.4 billion) this year in its CDMA business.
Chen Yunhong, an analyst from SinoLink Securities Co. Ltd., told Oriental Morning Post that the results of the bidding are expected to be announced before the end of this month.
China Telecom agreed to acquire China Unicom's CDMA business for RMB 110 billion ($16.15 billion) in early June as part of a larger telecom industry restructure directed by the government. The company intends to take control of China Unicom's CDMA business in October.
China Unicom's CDMA network has the capacity to support 70 million subscribers. The carrier had 43.15 million CDMA subscribers as of the end of May. They will become customers of China Telecom as part of the transfer. China Telecom also expects that one-third of its 60 million PHS (personal handy-phone system) subscribers will switch to its CDMA services.
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