Global telecom operators are under enormous pressure to develop next-generation telecom technologies, such as 3G, to meet market demands, but as a result of the global financial crisis, the majority of mainstream financing agencies based in Europe and the U.S. are trying to find ways to address issues such as inadequate liquidity and the credit crunch.
This is where China Development Bank perceives it has an advantage in possessing a healthy balance sheet as well as strong financing and credit ability, and sees positive future prospects for the global telecom industry. In light of this, CDB has entered into a strategic partnership with ZTE Corporation, a global provider of telecommunications equipment and network solutions, by signing a "Development of Financial Cooperation Agreement".
Under the agreement, both parties will work together to establish an investment and financing platform, including expansion to overseas markets. According to a five year cooperation framework agreement, China Development Bank will provide ZTE a USD15 billion credit line, including ZTE's overseas project financing and credit limits. The two companies are currently in discussion to develop specific terms and procedures on financing project and how to effectively execute the business cooperation.
China Development Bank has pledged to help ZTE in further strengthen and upgrading its position in the global telecoms industry with the aim of facilitating ZTE's entry among the ranks of the world's tier-one telecom operators. China Development Bank is the fifth largest commercial bank in China. In 2008, its total assets were valued at 2,890 billion RMB with non-performing loan ratio within 1%. The bank also holds exceptional advantage in the area of export credit.
With a strong financial capability, ZTE will be able to take advantage of potential business opportunities through a combined effort of expanding market reach and rolling out new technologies. This further helps the company to enhance its market competitiveness and ultimately achieve a win-win situation.
Despite the global economic crunch, ZTE has been upgrading its position in the industry steadily by adopting an aggressive marketing strategy. ZTE has announced a revenue of approximately CNY44.293 billion in 2008, which represented an increase of 27.37% over 2007. In the 3G tender bids offered by China's three largest telecom operators, ZTE obtained about 30% of the total local markets to deploy about 660,000 3G carrier frequencies, positioning itself as a leader in China's 3G industry.
