ZTE plans 2 billion yuan center for China Unicom e-books

ZTE Corp., China’s second-largest phone-equipment maker, plans to invest 2 billion yuan ($314 million) in a facility to support China Unicom (Hong Kong) Ltd.’s e-book service.

The Internet center in Changsha will be expanded over the next three years to more than 1,000 workers from 300 now, ZTE Vice President Yu Yifang said in an e-mail to Bloomberg News Tuesday. The center will support the WoReading service that China Unicom started in April, he said.

ZTE sees “very big potential” in winning computing- services work from carriers who are existing customers of its network equipment, President Shi Lirong said Nov. 17 in Hong Kong. As Chairman Hou Weigui diversifies the Shenzhen-based company beyond network gear, cloud computing will account for one-third of sales within three to five years, ZTE said in May.

Sophia Tso, a Hong Kong-based spokeswoman for China Unicom, said she didn’t have any information immediately available.

China Unicom’s WoReading service had about 21.5 million registered users as of Oct. 31, ZTE’s Yu said. The service, which allows users to download books, magazines and audio books on their phones, competes against China Mobile Ltd.’s Shouji Yuedu, which translates as “Mobile Phone Read.”

China Unicom was among ZTE’s first computing services customers, asking the company in November 2010 to set up an online store for mobile applications called the WoStore. That store has registered about 60 million downloads in its first year, ZTE’s Yu said.

ZTE’s Shi said last week China Mobile and China Unicom, the nation’s two largest carriers, had signed up for a “virtual office” system of computer storage and networking services that the company introduced this year.

ZTE fell 1.5 percent to HK$22.90 at 10 a.m. in Hong Kong trading. The shares have declined 11 percent this year compared with the 21 percent drop in the benchmark Hang Seng Index. China Unicom fell 1.6 percent to HK$16.52 and has gained 49 percent this year.

ZTE ranks behind Huawei Technologies Co. in phone-equipment gear sales in China. Huawei also plans to sell computing services and aims to more than triple revenue from that business within three to five years, to between $15 billion and $20 billion, from the $4 billion projected this year, it said in May. 

(Bloomberg)