BT chooses ZTE to develop mobile TV handsets

Chinese telecommunication equipment maker ZTE Corp. has won a contract awarded by BT Group PLC to develop mobile handsets that let users watch television.

The contract is a boost for ZTE, which has struggled to match the success of hometown rival Huawei Technologies Co. Ltd. in winning business from operators in developed countries. In addition, ZTE's international sales fell to 45 percent of overall revenue during the first half of this year, compared to 50 percent last year.

The BT deal calls for ZTE to develop 3G (third generation) mobile handsets that support the DAB-IP (Digital Audio Broadcasting - Internet Protocol) standard for streaming TV and digital radio to mobile devices, ZTE said. Financial terms of the agreement were not disclosed.

The handsets will be used with BT's Movio mobile TV service, which will enter commercial operation on October 1. The service, which will be offered in partnership with Virgin Mobile Telecoms Ltd., will offer television, Internet and voice telephony to 3G users in the U.K.

The deal between ZTE and BT is not the first time a Chinese vendor has been chosen to provide 3G handsets for a European operator. Earlier this year, Huawei won a five-year deal to supply Vodafone Group PLC with 3G handsets.

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