ZTE signs Comtech to US$10M supply deal

MARCH 8, 2007 -- Comtech Group Inc. (search for Comtech), a provider of customized designs for technology manufacturing, has announced that it has signed a US$10 million deal to supply telecom equipment and network technology vendor ZTE Corp. (search for ZTE) with optical module designs.

Under the terms of the agreement, Comtech will begin supplying the designs to ZTE in this quarter. The contract represents an extension of existing business between the two companies.

Jeffrey Kang, president and chief executive officer of Comtech Group, says the company expects the contract to increase Comtech's footing in the telecom sector. "The demand for solutions to support optical networks looks set to rise, along with the growth of the Chinese economy and the advent of broadband and 3G technologies," Kang states.

Comtech leverages relationships with China's major original design and equipment manufacturers (ODMs/OEMs) to combine their IP, creating designs that the company says help reduce time-to-market and development costs for telecom equipment vendors. This contract is the latest to be secured by Comtech in the telecom equipment market. In addition to optical device designs, the company also provides module designs to wireless, broadband, and datacom customers. Comtech serves all the major telecom equipment vendors based in China, including both multinational and Chinese corporations.

ZTE's business in the fiber-optic sector received a boost last October when the company clinched a deal with China Unicom to help the telecom operator place optical lines to connect cities in several Chinese provinces. ZTE also won a contract to provide transmission equipment for a network linking Guangdong province in China to Hong Kong and Macao. According to statistics from industry analyst firm Ovum-RHK, ZTE was the fastest growing mainstream optical network vendor between 2004 and 2006.

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