Following the alliance ZTE will establish its Southern Europe headquarters

SHENZHEN, China - Tuesday, December 2nd 2014 [ME NewsWire]

(BUSINESS WIRE) - ZTE Corporation (“ZTE”) (H share stock code: 0763.HK / A share stock code: 000063.SZ), a publicly-listed global provider of telecommunications equipment, network solutions and mobile devices, has signed a 10-year network-wide managed services contract with Euskaltel, the largest operator in the Basque Country, the most industrial and technologically advanced region of Spain. ZTE will also work with Euskaltel to guarantee its network quality, upgrade its technologies, and extend its services.

Following the deal ZTE will cement its headquarters in Basque Country, dedicated to the provision of services for the entire South of Europe, from where it will serve telecommunications operators in Spain, Portugal and the countries in the south of the continent.

Euskaltel was founded in 1995 with its headquarters in Derio, Basque Country, Northern Spain. With strong brand influence, healthy financials and high-quality networks and services, it is the preferred network provider for government, enterprise and residential users in the region and has high customer loyalty. In the Basque Country, Euskaltel has a 43 percent share of the broadband access market, 47 percent share of the fixed network market, and 60 percent share of the digital TV market. The company also started to commercialise mobile services in 2007.

Euskaltel made the decision in 2013 to review its managed services providers, and ZTE tailored the solution that was most suitable for its requirements. ZTE's service subsidiary in Southern Europe (ZTE Managed Services Southern Europe S.L.) will provide Euskaltel with network-wide managed services including NOC operation, field maintenance, last-mile maintenance, service provisioning and assurance, enterprise customer implementation and assurance.

Alberto Garcia Erauzkin, President of Euskaltel, said: "Euskaltel did not select the cheapest solution or the solution with the lowest expected costs, but selected the solution that is best for Euskaltel's technology evolution and provides the best conditions (including professional development conditions) for employees."

With the signature of the contract,133 of Euskaltel's employees will join ZTE's service subsidiary, and will provide high-quality services for more customers in the future. ZTE has customised a manpower transfer solution for them, which safeguards Euskaltel's targets, ZTE's, and the transferred employees' interests, and lays a solid foundation for smooth service transfer and contract delivery.

To provide agile and high-quality services, ZTE will establish its headquarters in the Zamudio Technology Park, where Euskaltel's headquarters is located. The new headquarters will also create new employment opportunities in the area. This organisation will provide technical support in accordance with Euskaltel's network evolution plan to meet its requirements for multidimensional development.

Euskaltel and ZTE will establish the voice over IP (VoIP) service for Basque Country users. One of the benefits of this new service is that it allows for the incorporation of all types of voice, multimedia and data services in a platform which can be accessed from any device connected, whether from a landline or mobile devices.

Xiao Ming, President of ZTE Europe, said, “this is an essential step forward in our investment in Europe, incorporating into our company the experience and knowledge of Euskaltel’s highly qualified personnel. ZTE is in a growth phase in Europe and this is a necessary step in allowing us to successfully complete the new projects this will present”.

Global Services has become one of ZTE’s most important businesses. From 2009 to 2013, the compound growth rate of the service business was 32 percent, and the growth rate of managed services was up to 42 percent. Over 140 Managed Service contracts in total have been signed around the world. Especially in European markets, managed services are developing steadily. In recent years, ZTE has signed comprehensive Managed Services agreements with H3G Austria, Polkomtel in Poland, Jazztel in Spain, E-Plus in Germany and KPN in the Netherlands.

About Euskaltel

Euskaltel is the second cable operator in Spain and the broadband leader in the Basque Country, with 43% market share, as well as in Digital Television, where it has a market share of almost 60% and shares the leadership in Fixed Lines where there is the own Euskaltel network, with 47% of active lines. With regard to contract mobile lines, it has a share of 18%, making it the second operator of this type of mobile lines in the households of the Basque Country.

It is, furthermore, the first alternative operator in Spain by market share in Fixed Lines in its sphere of action, reaching penetration levels in the different businesses clearly higher to those of the first alternative operator in the rest of Spain.

Euskaltel ended last year with profits of 50.1 million euros, up 4.1% on the previous year, and an EBITDA of 155.1 million euros, which meant a 15.1% increase on the previous year, compared to the wide-spread downturn of around 9% posted by the other major operators. And at the same time, Euskaltel have slashed the debt by 86.1 million euros, resulting in a debt ratio of 2.1 times the EBITDA, which reflects the financial strength of the company.

About ZTE

ZTE is a publicly-listed global provider of telecommunications equipment and network solutions with the most comprehensive product range covering virtually every telecommunications sector, including wireless, access & bearer, VAS, terminals and professional services. The company delivers innovative, custom-made products and services to over 500 operators in more than 160 countries, helping them to meet the changing needs of their customers while growing revenue. ZTE commits 10 per cent of its annual revenue to research and development and has leadership roles in several international bodies devoted to developing telecommunications industry standards. ZTE is committed to corporate social responsibility and is a member of the UN Global Compact. The company is China’s only listed telecom manufacturer that is publicly traded on both the Hong Kong and Shenzhen Stock Exchanges (H share stock code: 0763.HK / A share stock code: 000063.SZ). For more information, please visit www.zte.com.cn.

Contacts
ZTE Corporation
Margrete Ma
+86 755 26775207
ma.gaili@zte.com.cn

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