Welcome to Day 3 of CTIA. I had an interesting conversation yesterday with Chinese vendor ZTE, which has been blazing infrastructure and handset deals throughout Europe in recent months. Now it has its sights on the U.S. market, as does another Chinese vendor, Huawei. Both vendors introduced infrastructure equipment for the CDMA market. While the U.S. CDMA market appears to be locked up by the big players such as Lucent and Nortel, ZTE believes it has an opportunity to slide in among them, especially as Sprint and Verizon upgrade to EV-DO Rev. A, the next evolution of EV-DO. Meanwhile, many Tier 2 and 3 operators have yet to upgrade their CDMA networks to high-speed capabilities. When it comes to global CDMA equipment shipments, ZTE is actually on par with Lucent and Nortel, and QUALCOMM considers the company one of is biggest customers.
ZTE has also been selling a PTT system that has already been sold to 20-plus operators worldwide, and Nortel is OEMing the solution. QUALCOMM is a proponent of the IP PTT system. Remember that QUALCOMM already offers its Q-Chat product that Sprint Nextel plans to use when it upgrades to EV-DO Rev. A. (Sprint hasn't confirmed that but a number of analysts already have.) So we could see some of ZTE's PTT elements in the Q-Chat solution.
On the handset side, ZTE has won a number of major contracts with operators such as Vodafone and Hutchison in Europe because it is willing to highly customize handsets for them in an era that sees Nokia and Motorola trying to push their own brands. ZTE will do the same in the U.S.
ZTE knows it just can't knock on operators' doors and declare themselves available. Samsung and a host of other CDMA vendors have unsuccessfully tried to crack the U.S. CDMA market. Verizon CTO Dick Lynch told me yesterday that although he welcomes more vendors to drive down prices, Verizon has to be convinced that any new vendor can come in and match the quality and longevity it gets from current suppliers.
"We're coming in with a humble approach," said Lance Cornish, senior director of wireless business development with ZTE. "We know we have to listen to customers, be focused and build long-term relationships." - Lynnette
Correction: Yesterday's report erroneously reported that Vodafone KK was sold to Softbank for $48 billion. The correct figure is $15 billion.