ZTE to Renew Bids for U.S. Contracts After Blocked Sprint Deal

To tap into growth opportunities in the U.S., China's second-biggest maker of phone-network equipment has invested in fourth-generation wireless technology equipment

(Bloomberg) ZTE Corp., China's second-biggest maker of phone-network equipment, will renew attempts to bid for U.S. contracts after it said opposition from the government foiled the signing of a previous deal with Sprint Nextel Corp.

"The U.S. government has a broadband agenda and we want to make a contribution to this agenda," ZTE Chief Financial Officer Wei Zaisheng said in an Feb. 14 interview at the Mobile World Congress in Barcelona. "We hope to help further development of Sprint."

In October, U.S. lawmakers asked the Federal Communications Commission to review the security risks of domestic companies such as Sprint Nextel using equipment from ZTE and Huawei Technologies Co. Sprint ultimately ordered gear from other suppliers.

ZTE, based in Shenzhen, China, makes mobile phones, data cards and infrastructure for wireless networks. It has boosted revenue in many markets by offering advanced technologies at low prices. To tap into the growth opportunities in the U.S., the company has invested in fourth-generation wireless technology equipment.

At the time, Sprint was "very satisfied" with the contract, which was the best in terms of technology and financing, Wei said.

Sprint's network chief Bob Azzi told reporters yesterday in Barcelona that the carrier chose its vendors and wasn't influenced by any government intervention.

The U.S. has less confidence in Chinese network vendors, Wei said. The government "is also protecting local vendors but it's only in their short-term interests," he said. "We still have contracts with them on the handset side."

Surging Sales

ZTE has used the rising popularity of smartphones running Google Inc.'s Android operating system to expand sales of handsets in the U.S. and Europe. Europe was the country's fastest-growing market last year as revenue jumped 150 percent, ZTE said last month. The company also doubled sales in the U.S. last year.

The company has 3 percent market share in handsets in western Europe, Wei said. "We hope to have this percentage in America or even exceed this."

Sales of mobile phones, tablet computers and wireless data cards are projected to jump 33 percent to 120 million units this year, ZTE, based in the southern city of Shenzhen, said last month. Sales of those products worldwide jumped almost 50 percent last year to 90 million units, lead by demand in Europe and the U.S., the company said at the time.

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