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The gear will help China Mobile build a network based on domestically developed wireless technology after negotiations are completed, ZTE said in a statement to the Shenzhen Stock Exchange, without specifying financial terms. ZTE clinched about 3.2 billion yuan (US$414 million) in orders, according to Chinese industry group TD-SCDMA Forum.

The contracts are China Mobile's first orders for a network that may cost an estimated US$3.1 billion, moving the world's largest mobile-phone market by subscribers a step closer to introducing so-called third-generation wireless services. The government has said it will offer 3G services for the 2008 Beijing Olympics.

"It's important for ZTE to win orders at the start because China Mobile will have to buy more equipment from ZTE when they expand the network,'' Randy Zhou, who rates ZTE shares "underperform" at Bank of China International in Shanghai.

Shares of ZTE rose 1.5 percent today to close at 47.86 yuan in Shenzhen, extending this year's gain to 22 percent. The company's Hong Kong-listed shares didn't trade today because of the Easter holiday.

Ericsson AB, which partnered with ZTE in bidding for the contracts, probably received about 260 million yuan in orders for the time-division synchronous code division multiple access gear, Chen Haofei, secretary general of the TD-SCDMA Forum, said in a telephone interview.

Datang Telecom Technology Co's venture with Alcatel-Lucent won orders of about 2.45 billion yuan, Chen said. TD Tech Ltd, a venture between Siemens Communications Group and Huawei Technologies Co, and China Putian Corp, will also supply equipment to China Mobile, he said.

Li Jun, a China Mobile spokesman, declined to comment.

Alcatel and Datang Mobile won preliminary orders for equipment to be used in Guangzhou and Shanghai, said Cao Yong, a Shanghai-based spokesman for an Alcatel-Lucent venture in China.

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