Europe : Vodafone Group and ZTE Corporation announced a handset procurement agreement which will see the Chinese company produce a range of Vodafone-only branded, ultra-low coshandsets for sale across Vodafone's Markets.

The handsets will only carry the Vodafone name, adding to the range of devices which Vodafone offers branded in this way for the consumer market, and marks the continuation of Vodafone's Original Design Manufacturer strategy, which is intended to bring to market high-quality and low-cost devices under the Vodafone name.

Vodafone anticipates offering the first Vodafone-branded, ZTE-manufactured handset, a 2G ultra-low cost device, created particularly for sale in Emerging Markets, in the second quarter of 2007.

Jens Schulte-Bockum, Vodafone's Global Director of Terminals said: "Vodafone's Original Design Manufacturer strategy is intended to use Vodafone's size and purchasing power to engage with the best white label handset makers and then use the power of the Vodafone brand to bring their products to market. We are pleased that we have signed this agreement with ZTE which will build on their experience in emerging markets to create for us an ultra-low cost handset as the first of a
range of products we seek to develop with them."

He Shiyou, senior vice president of ZTE added: "This agreement with one of the world's largest mobile operators is a breakthrough for us and highlights ZTE's ability to develop handsets according to European Operators' requirements and standards. Vodafone's requirements include
world class design and quality standards combined with competitive cost structures. The signing of this agreement has demonstrated ZTE's capability and commitment to fulfil these requirements and deliver volumes meeting the needs of a world class operator."