ZTE Corp, China's biggest publicly traded phone-equipment maker, is trying to sell its gear to Deutsche Telekom AG and Vodafone Group Plc to help bolster overseas sales and expand into Western European markets.

ZTE, which opened an office in Munich three months ago, has offered some test equipment for fixed-line and wireless networks to potential clients in Germany including Deutsche Telekom, Europe's largest phone company, said Haifeng Ling, head of ZTE's German unit. Vodafone and its German fixed-line unit Arcor AG are also talking to ZTE about testing gear, he said.

"Germany is a very meaningful market," said Ling, who has lived in Germany for 23 years, including 15 years working at Deutsche Telekom and Siemens AG. "If you want to be in an international player, you have to be there."

ZTE and bigger rival Huawei Technologies Co have taken advantage of lower production costs in China to undercut the prices of overseas competitors such as Ericsson AB and Cisco Systems. Shenzhen-based ZTE's sales outside China more than doubled to 4.6 billion yuan (US$556 million) last year. In Europe, ZTE has won only smaller orders in Norway, Romania and Greece, Ling said.

With about 72 million mobile-phone users, Germany is Europe's largest wireless market. The fixed-line phone market is dominated by former monopoly Deutsche Telekom, while rivals such as Arcor and QSC AG are expanding their networks.

ZTE aims to cut its reliance on the Chinese phone market as China has yet to make a decision on issuing licences for third-generation wireless networks. At a conference in Bonn this week, attended by carriers including Swisscom AG and Telefonica SA, ZTE is demonstrating its 3G network equipment, based on the universal mobile telecommunications system, or the faster wireless standard used in Europe.

"We're not against new suppliers entering the market, and we enjoy a more competitive environment from our perspective," said Hamid Akhavan, chief technology officer at T-Mobile International AG, Deutsche Telekom's wireless arm. He was referring to Asian equipment manufacturers and refused to comment on ZTE specifically. Nokia Oyj and Siemens currently supply most of the equipment for T-Mobile's UMTS network in Germany.

ZTE's office in Munich plans to more than double its staff to 100 people by the end of this year, Ling said. The company is also studying a proposal to set up a factory in Germany if it receives sufficient orders, he said. Siemens, Germany's largest manufacturer of phone equipment, is also based in Munich.

(China Daily July 1, 2005)