ZTE and 3 UK help each other to challenge the giants

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ZTE and 3 UK help each other to challenge the giants

By CAROLINE GABRIEL

Published: 6 October, 2009

The UK arm of Hutchison 3 may be facing the prospect, once T-Mobile and Orange merge their own UK units, of being the also-ran in this over-competitive market, but it continues to punch above its weight in terms of innovations. Its handsets optimized for key web services like Facebook, its new customer agent scheme, and now a new mobile banking offering, created with Monitise. Plus the carrier continues to tap into many new sources of phones to keep its portfolio cost effective and fresh - the latest being ZTE, whose ambition to take a major share of the cellphone market in developed economies was boosted this week by a cross-border deal with 3.

The Chinese vendor has set itself a target of being the world's third handset supplier by 2014, but most of its progress outside its homeland so far has been in emerging economies, notably India. It is starting to creep into developed markets though - it has been supplying midrange CDMA phones to US flat rate carrier MetroPCS since 2007 and is working with that cellco on LTE devices; and it has sold low end and white label phones to various European carriers. Its flagship device for moving up the value chain is the X760 touchscreen, which in June netted ZTE a deal with Bouygues Telecom of France, the first time the Chinese player got its own brand onto a French phone (though it offers 15 white label models in the country).

The X760 is positioned as an affordable touchscreen webphone, and so sits in the heart of the current growth market for handsets, and ZTE said at its event in Lisbon, Portugal yesterday that this device now sells in 20 countries through 24 carriers including T-Mobile and Vodafone in Europe. It comes with a 2.4-inch touchscreen display, 1.3-megapixel camera, video player/recorder, FM radio, MP3 player, WAP browser, MMS, Bluetooth and up to 4Gb of memory via microSD, and will continue to be the leader of the ZTE push into the midrange web market this fall.

But another phone has caught 3's eye, and the carrier will take the F102 for its UK, Irish and Scandinavian markets. The F102 is a 3G phone with 2-megapixel camera, MP3 player, color screen, Bluetooth, USB and MicroSD memory card. It speaks to the current zeitgeist by being optimized for social networking, as well as preloading Skype and Windows Messenger. It will be the first ZTE handset to be sold in Sweden.

David Moore, 3's product manager, said in a statement: "ZTE has helped us to develop and expand our range of pay-as-you-go handsets in the UK, bringing high specification, stylish devices to a wide audience. This has helped us to meet consumer demand for mobile internet services on low cost tariffs."

"Starting with 3 UK, 3 Ireland and 3 Scandinavia, ZTE is fully geared to support H3G's global business and other operators. We aim to become one of the top five handset developers worldwide by 2011 and our goals are clearly in sight," said Tony Brunt, ZTE UK's sales director.

Also at 3 UK, mobile money provider Monitise has partnered with the cellco, whose subscribers will be the first to gain access to mobile banking software directly from their handsets, with services such as SMS bank balance alerts and real time bank account management. Such apps are accessed via the 3 UK 'My 3' portal. Alastair Lukies, CEO of Monitise, said: "Collaborations with financial institutions will help operators deepen relationships with their customers by offering mobile money services using a variety of access mechanisms."