ZTE Corp. and Datang Mobile have between them won the lion's share of China Mobile's second-round TD-SCDMA equipment tender, analysts told Interfax on Nov. 12, despite the lack of an official announcement by China Mobile.

A report by Sandian Research released on Nov. 11 suggested that Datang Mobile, Alcatel Shanghai Bell, New Postcom and FiberHome together won the majority share of the second-round tender with contracts totaling around 40 percent of the total equipment to be supplied. The report said that ZTE secured contracts to supply equipment worth between 27 percent and 28 percent of the total tender. Huawei will produce equipment accounting for between 17 percent and 18 percent of the total tender, while Nokia Siemens, China Putian and Ericsson divided up the remaining shares.

ZTE, the manufacturer favored in China Mobile's first-round tender for TD-SCDMA equipment, found itself forced to give up some of its contract share to rivals Datang Mobile and Huawei, according to Will Kong, an industry analyst with iSuppli Research. Kong suggested that the equipment contracts awarded to ZTE is likely to be 25 percent of the total.

Following the release of the Sandian Research report, dual Shenzhen and Hong Kong-listed ZTE saw its stock price in Shenzhen end a recent rally to close down 9.28 percent at RMB 17.7 ($2.59) on Nov. 12.

However, a PR official at Datang pointed out that in this second round tender, Datang should not be grouped with New Postcom and FiberHome.

"In China Mobile's first round TD-SCDMA equipment tender, Datang Mobile formed a partnership with Alcatel Shanghai Bell, New Postcom and FiberHome, but in this second round tender, Datang Mobile only cooperated with ASB," Zhang Yan, a PR official from Datang Telecom, told Interfax, "However, the media still count FiberHome and New Postcom as being among Datang Mobile's network of related companies, because the two companies use our products."

"In reality, Datang Mobile, together with ASB, won a minimum of 25 percent of the second round tender," Zhang said, putting Datang Mobile's and ZTE's shares of the tender almost level.

Sandian Research's report said that Datang Mobile won the big share of the tender because of the low prices they offered, but Zhang Yan disgreed, telling Interfax that there was little variation between the competitors in terms of price during this round.

"Huawei submitted the highest prices for this round of the tender," Kong said. He indicated that the good relationship between China Mobile and Huawei was key to its capturing a good market share.

China Mobile's second round TD-SCDMA construction will cover 28 cities. The company further plans to expand its TD-SCDMA network to cover an additional 162 cities in 2009. "China Mobile's progress in TD-SCDMA network deployment will boost the development of TD-HSDPA services, an advanced version of TD-SCDMA and improve users' experience with TD-SCDMA services," Kong said.

Kong also believes more TD-SCDMA mobile handset tenders will be launched in next year. However, he pointed out that TD-SCDMA handset manufacturers may face financial pressure because they will be unable to get investment returns in the short term from the fledgling domestic TD-SCDMA market.

Source:INTERFAX-CHINA