China’s ZTE takes third generation mobile phones to East Timor

6 July 2009

Dili, East Timor, 06 July – Chinese telecom company, ZTE is working with Timor Telecom to introduce third generation mobile phones throughout the country, making telecommunications one of the main sectors for bilateral cooperation, on a par with energy.

“According to the contract, by expanding East Timor’s existing Global System for Mobile Communication (GSM), coverage of the whole country will be achieved, as well as access to WCDMA (Wideband Code Division Multiple Access) services, which establishes the rules for radio access used by ZTE Corporation for third generation mobile systems,” says the statement by the Economic and Commercial Section of the Chinese Embassy in East Timor.

The signing ceremony for the contract between China’s ZTE Corporation and Timor Telecom for the provision of third generation equipment and services for 3G mobile phone requirements and technologies took place in Dili last May.

The project is already underway and is expected to be concluded by next August, “enabling Timor Telecom to ensure total access to wireless broadband throughout East Timor,” added the same source.

Founded 24 years ago, state-owned ZTE has already seen foreign sales overtake those made in its own country.

The company, which produces telecommunications equipment and network solutions, is little known to consumers since its strategy overseas has been to produce equipment to sell directly to telephone companies, which put their own brands on the products.

However, in Brazil ZTE is launching its own mobile phone brand for low- and medium-cost market segments.

Latin America represents around 7 percent of ZTE’s global revenue and the group’s aim is to increase income in the region by 200 percent.

Recently the company obtained a credit line of US$15 billion from the China Development Bank to fund overseas expansion, helping those operators having difficulty obtaining credit.

The agreement with Timor Telecom enables ZTE to establish itself as one of the main Chinese companies in the country, at a time when bilateral economic and diplomatic relations are on the rise.

According to the Jamestown Foundation’s recent report, access to Timorese oil and gas reserves is one of China’s main interests in East Timor, although up until now, without great success, particularly on land prospected by PetroChina in 2005.

The great “prize,” says the document, “would be access to East Timor’s liquefied natural gas (LNG) reserves,” particularly in the “Greater Sunrise” field, with an estimated 8.3 trillion cubic feet of gas, as well as 300 million barrels of crude oil, says the report.

The construction of a gas pipeline to a processing station in Timor is on the table, a project which is being closely followed by Chinese state energy companies, interested in construction and the purchase of gas.

“Since the independence of East Timor, China has established itself as an important player in the country’s diplomatic and political issues. Though its role has widened, particularly in comparison with Australia, Portugal, Indonesia and the United States,” says the report by the American think tank.

China was the first country to establish diplomatic relations with East Timor, in 2002, and official aid has been growing steadily since, although it is still below the amounts provided by its traditional partners and the United Nations.

Funding has been used above all for the construction of public buildings, particularly those housing the Foreign Affairs Ministry (completed at the start of 2008 at a cost of US$7 million), but also the Presidential Palace and the Timorese Army Headquarters (each costing US$6 million), which are under construction.

As regards human resources, over the last seven years over 400 Timorese civil servants and technicians have received training in China in the areas of public administration, economic planning, tourism, health, construction and technology.

The Chinese community in East Timor is estimated at up to 3000 people.

Trade has increased from US$1.7 million in 2005 to US$9.4 million, making China the fourth largest trade partner for East Timor.

In East Timor the launch of several important infrastructure projects is expected this year, such as the construction of the airport, new roads, dams and port facilities, and Chinese construction companies are expected to be involved, although there will be “strong competition” from Korean, Indonesian and Malaysian counterparts. (macauhub)