ZTE Company Competition for orders with Alcatel-Lucent

ZTE finally broke the deadlock domestic equipment manufacturers to expand the Indian market. However, the price war clouds have not dissipated, the profit margins are still a major test equipment manufacturers.

According to reports, India's state-owned telecom operator Bharat Sanchar Nigam Ltd. (hereinafter called "BSNL") announced that 14.37 million line of network expansion equipment contract was awarded to ZTE and Alcatel-Lucent, the estimate of contract value of about 60 billion rupees ( $ 1.09 billion U.S. dollars).
BSNL third expansion tender. BSNL on the last tender is the company's 45 million-line network expansion in 2006, and subsequently reduced in 2007 to 14 million lines. Since then, the Dell Inspiron 1545 battery company in 2008 to issue 93 million lines and 5.5 million in 2010-line bidding, but later the two tender was canceled.

According to the Wall Street Journal reported that the equipment manufacturers involved in the tender in addition to ZTE and Alcatel-Lucent, Huawei, Ericsson and Nokia Siemens sources, ZTE's bid for $ 840 million, while Huawei 1.3 billion U.S. dollars, Alcatel-Lucent $ 1.8 billion, Ericsson is $ 2.3 billion, Nokia Siemens is a $ 2.5 billion.

After the end of the bidding, several equipment manufacturers in addition to ZTE said it could not accept the offer of ZTE, and plans to quit competing. A Huawei said, "this price is technically feasible. In fact, if Huawei refused to participate in devices ZTE's price means that BSNL will once again re-tendering.
However, from the Inspiron E1505 battery final results, Alcatel-Lucent to accept this "harsh" price. BSNL, a top executive said, Alcatel-Lucent and ZTE's bid is the same.

BSNL in the past two years has been the expansion of mobile networks, and with two other rival Bharti Airtel Ltd. and Vodafone India Ltd competition to ease the pressure on the market share. As of the end of March 2012, BSNL accounts for 10.72% of Indian mobile phone market share has more than 98.51 million subscribers. BSNL throws in recent years are very large orders, but the price is also very harsh.

Before the Indian authorities on grounds of "security issues" start survey of Chinese equipment manufacturers such as Huawei, ZTE, a serious delay the progress of the whole tendering now appears that this "stalemate" is being gradually break down.However, according to the Government of India, the safety of operators, large orders must require at least two or more latitude e5500 battery suppliers, and at the same time, the final orders for equipment manufacturers to provide equipment to the lowest price in the bidding process, if you can not meet the above conditions, will face the "bids".


For ZTE, this order of BSNL will help its improved significantly in the Indian market share, ZTE said in the notice of the local, the order will help BSNL to expand mobile phone network capacity, allowing BSNL in India's northern and southern New 10.15 million customers. For Alcatel-Lucent equipment market operators continue to be squeezed, this order is not a small "gains".
Order behind only the dell d410 battery profit margins of the equipment manufacturers presented a major test, ZTE's 2011 revenues increased by 23.39%, but net profit fell 36.62%. The first quarter of 2012, Alcatel-Lucent's revenue fell 12 percent to 3.21 billion euros, the operating loss widened to 289 million euros.