ZTE Corp, a Shenzhen-based telecommunications equipment provider, has captured the bulk of the latest 8.6 billion yuan (HK$9.77 billion) 3G network expansion tender by China Mobile Communications Corp. ZTE won about 34 per cent of the tender, China Mobile said on Monday. Huawei Technologies won 22 per cent while partner Nokia Siemens Networks claimed 7 per cent. Datang Mobile Communications Equipment and domestic partner FibreHome Technologies ranked third with a 21 per cent share. The rest went to China Putian, New Postcom and Ericsson, each winning five to six per cent. 'Vendors with a self-developed capability in TD-SCDMA technology score higher marks in all three phases of TD-SCDMA tenders,' said 3Tel Consulting, a mainland telecommunications industry research firm. ZTE and Huawei were helped by their offers of a free upgrade in China Mobile's existing TD-SCDMA equipment, which was installed in the previous two phases of network construction, analysts said. Industry watchers said China Mobile's preference for supporting domestic vendors and homegrown technologies also enabled ZTE, Huawei and Datang to take a bigger share. As a result, foreign vendors' share was shrinking, they said. The latest tender was the third by China Mobile for a network covering 200 cities or 70 per cent of the areas on the mainland. The original contract size was about 8.6 billion yuan for the installation of 39,000 base stations. Credit Suisse said ZTE's reported market share of 34 per cent was higher than its expected 20 per cent share for this year. 'However, due to price competition, the actual third-phase contract size may be lower than 8.6 billion yuan,' Credit Suisse analyst Wallace Cheung wrote. 'Assuming the contract size is seven billion yuan, ZTE should receive 2.3 billion yuan worth of contracts, higher than our expected 1.5 billion yuan revenue in the second half this year,' he said. Mr Cheung expects ZTE to help its customers maintain gross margins at 35 to 36 per cent this year and next.