ZTE signs managed services contract with Spanish operator Euskaltel

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% share of the broadband access market, 47% share of the fixed network market, and 60% 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) 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%, and the growth rate of managed services was up to 42%. 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.