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UPDATED: Telco giant ZTE makes channel push in A/NZ

UPDATED: Telco giant ZTE makes channel push in A/NZ

Signs exclusive deal with Nextgen Distribution

Chinese telecom equipment maker, ZTE, is making a push into the Australian enterprise space via the channel, inking an exclusive partnership deal with Nextgen Distribution.

The partnership brings a 100 per cent channel-focused portfolio of enterprise networking and video conferencing solutions, according to a statement by Nextgen.

The agreement brings to Nextgen Distribution exclusive access to ZTE’s switching, routing and video conferencing products to take to channel partners in A/NZ. Each product is supported with a five-year year warranty, which includes local and global support, according to a statement.

The enterprise products and solutions portfolio includes routing, switching and video conferencing solutions.

ZTE A/NZ executive director, Alain Saaroni, said, “After an exhaustive review of distributors, we settled on an exclusive agreement with Nextgen Distribution because they displayed a clear understanding of the channel; had deep channel relationships; and were passionate about taking challenger brands to market. The exclusivity allows us both to invest in each other’s businesses for long term growth and success.”

Nextgen Distribution managing director, John Walters, in a statement said, “ZTE rounds out Nextgen Distribution’s networking portfolio to provide enterprise-class products to a wide range of businesses.”

The distie is hoping to play into the commoditisation of data communications and video conferencing trend, which are ready for new challengers that provide quality products at vastly reduced prices,” Walters said.

The company's five-year warranty and product pricing puts it ahead of its competition, offering better margins, increased quality and good rules of engagement with the channel, said Walters. Nextgen also sees now as opportune time to invest in the telco networking space with the plans for a broader NBN. The company is already "carrier-grade" telco equipment provider with a partnership with Telstra, he noted.

Nextgen Distribution undertook an extensive due diligence and pored over more than 14 analyst reports in addition to site visits in China before engaging the partnership. The company, which is listed on the Hong Kong Stock exchange, is also much more transparent about its operations than some other private Chinese companies that operate in the sector.

The distie is confident ZTE is poised for a "great future" given its recent efforts to restructure its business, noted Walters.

"We are betting our brand name on it," said Walters. The restructuring efforts have already started paying off, with the company posting a 36 per cent increase in in net profit for its first quarter ending March 2013, he noted.

Nextgen Distribution is focused on delivering enterprise class technologies representing vendors including Oracle, Arista Networks, Nominum, Objectivity, V3 Systems, and Violin Memory.

ZTE, listed on the Shenzhen and Hong Kong Stock Exchange, has courted controversy in recent years. Late last year, a U.S. House Intelligence Committee report claimed the telco, along with its rival Huawei, posed a national security threat and urged American government and companies to avoid doing business with them. The company has denied those allegations.

ZTE reported a net loss of 2.8 billion yuan ($US 455 million) in 2012, which it hopes to turn around this year, according to a recent Wall Street Journal report. Those losses were attributable to restructuring charges.

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