ZTE to develop 3G mobile phones for Telefónica

February 21, 2007

Telefónica España and ZTE, a global provider of telecommunications equipment and network solutions, have reached an agreement to jointly manufacture and distribute 3G mobile handsets for the Spanish market. The new ZTE phones will be launched by Movistar during 2007 and will boast the latest technology and features at a highly competitive price.

Telefónica and ZTE will form a joint team to work on the development projects and an independent team will be formed to develop ZTE products in Spain. The first product of the collaboration will be a 3G phone, called the F230, developed for Movistar by ZTE.

Shiyou He, Senior Vice President, ZTE, said: "From a geographical and economic point of view, Spain is a key market for ZTE. Therefore, an agreement with the leader in that market-Telefónica-is an ideal opportunity to show our technological expertise in the development of new 3G handsets."

Luis Ezcurra, General Manager of Business, Telefónica Móviles España, said: "The agreement with ZTE, one of the most significant telecommunications manufacturers in the world, will enable our customers to access the new services provided by 3G technology."

Telefónica Móviles España is the mobile operator of the Telefónica Group in the Spanish market and, at the close of the third quarter of 2006, it had more than 21 million clients and a wide range of services and applications that use the latest mobile technologies, including UMTS and HSPA. Movistar is the brand for the mobile companies of the Telefónica Group in Spain and Latin America, except Brazil.