Speculation on mainland 4G network expansion helps lift ZTE shares

PUBLISHED : Thursday, 07 March, 2013, 12:00am
UPDATED : Thursday, 07 March, 2013, 6:12am

ZTE, China's second-biggest manufacturer of telecommunications equipment, saw its shares surge yesterday on news of a strategic partnership and renewed speculation that mainland licences for high-speed 4G mobile services could be issued this year.

Shenzhen-based ZTE's share price rose 8.94 per cent to finish at HK$14.14, its biggest one-day gain since January 29, 2009 when the company was lifted by news of being included among the major suppliers of 3G network equipment for China Mobile.

The company, which was ranked by research firm IDC as the world's fourth-largest supplier of mobile phones last year, yesterday announced a strategic collaboration with semiconductor giant Intel on advanced smartphones. The chipmaker is currently developing unique smartphones for ZTE that are powered by its new Intel Atom Z2580 processor.

ZTE is targeting worldwide shipments of 50 million smartphones this year, up from 35 million units last year.

"We're confident that the combination of high performance, competitive battery life and overall value [on Intel-powered ZTE smartphones] will be appreciated by consumers," said Hendrik Unkel, the director for marketing and business development at Intel.

ZTE was also helped by news published yesterday in the official China Securities Journal, which cited Miao Wei, the Minister of Industry and Information Technology, as saying that the government may issue the licences for 4G mobile services this year.

The timeline would be determined by the expansion of China Mobile's 4G network trials. The world's biggest wireless network operator, which had 714.7 million subscribers at the end of January, is set to roll out 200,000 4G base stations this year. That is a big jump from its deployment of 20,000 base stations in 13 cities at the end of last year, in which ZTE was a major network equipment supplier.