ZTE wins optical networking deals in China

Chinese telecommunication equipment maker ZTE Corp. has signed deals to provide high-end optical networking gear to China’s two largest fixed-line operators, China Telecom Corp. and China Netcom Communication Group Corp.

The deals, which were concluded in December, underscore how far domestic equipment makers like ZTE have come in recent years in their efforts to develop high-end networking gear, and are yet another sign that capital expenditures (capex) by Chinese operators will resume faster growth this year after slowing in 2002.

China Telecom has tapped ZTE to provide DWDM (Dense Wave Division Multiplexing) equipment for a regional optical backbone network with a maximum capacity of 80G bps (bits per second) being constructed across seven provinces in northwest China, ZTE said in a statement. All of the DWDM equipment to be used in the network will come from ZTE, including around 70 sets of optical terminal multiplexing equipment and optical line amplifiers, it said.

At the same time, China Netcom will employ DWDM and SDH (Synchronous Digital Hierarchy) equipment from ZTE in a 320G bps optical network under construction in China’s southern Guangdong province, the company said. The value of the two deals was not disclosed.

Telecom capex spending growth in China slowed during 2002 as a result of restructuring at China Telecom, which split the dominant fixed-line provider into two companies, China Telecom and China Netcom. While China’s Ministry of Information Industry (MII) reported earlier this year that the restructuring had been a factor in slowing capex spending growth by more than 30 per cent, some vendors have since reported signs of a recovery, noting that Chinese operators are once again looking to resume infrastructure construction.