Shortly after ZTE Corporation (SEHK:0763, SZSE: 000763), China's second largest telecom networking gear maker, claimed to have won a contract from Portugal-based Optimus to set up GSM/UMTS/LTE networks by beating Ericsson, Motorola, and Huawei Technologies, a former ZTE employee discloses that ZTE has exaggerated its overseas achievement.

The former employee adds that ZTE's biggest rival in the international market is Huawei Technologies, but not its foreign peers. At times, ZTE and Huawei would wage price wars to win customers abroad. There really was a bloodbath of markdowns and such an erosion of profit margins.

ZTE salespersons are at a disadvantage position as compared with their counterparts in Huawei when it comes to demonstrate products. "Had it not been for the close connection with the Chinese government, ZTE would have been swallowed up by Hauwei Technologies," says the person.

 source:tradingmarkets