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Digicel did a deal with ZTE. I want to understand what the terms of the deal was between the two companies.
Hello there! Thank you for asking Wonder to research the Digicel deal with ZTE and the terms of the agreement. The short version is that after searching extensively through industry reports, press releases, news articles, and a variety of Google search results, I’ve determined that the information you requested is not publicly available because the deal is recent (and not included in a ZTE annual report or other publication) and Digicel is a private company without such reporting requirements. However, I was able to find details that were publicly released, as well as information about Digicel's financial troubles and recent announcement of layoffs as well as ZTE's illegal dealings with Iran. Below you will find a deep dive into my research and methodology.
METHODOLOGY
After searching exhaustively, I have not been able to find any specific terms about Digicel's use of equipment from ZTE to expand its 4G LTE networks across 26 markets in the Caribbean and Central America. I began by searching the companies' names and the terms "deal" and "partnership," but the main results were identical press releases found in a variety of publications, such as Developing Telecoms from the end of March 2017.
Main details of the press release include:
** ZTE’s 4G LTE solutions, such as Uni-RAN, are expected to help Digicel improve and optimize its network's mobile Internet connectivity and coverage in the previously mentioned regions.
** "Based on ZTE’s software defined radio (SDR) technology, Uni-RAN protects operators’ investment and dramatically reduces network costs and increases the stability and reliability of network operation," according to the article.
** The partnership is part of Digicel's recently-announced 2030 global transformation program, where it promised "customers a completely new communications and entertainment experience made possible by a more agile, customer-centric application of resources and investment," the press release states.
As I researched relevant news articles about Digicel and ZTE, I found details about each company's recent difficulties, but nothing detailing the terms of their partnership. I looked through ZTE's financial reports, but nothing detailed the deal or intentions toward this partnership.
HELPFUL FINDINGS
While I could not find a direct answer to your query, I was able to gather some recent information about each company that could prove useful in understanding the circumstances of their agreement.
**DIGICEL
According to a February feature in Irish Times (at the same time the deal was announced), Digicel would be laying off more than 1,500 people (or 25 percent of its workforce) over the ensuing 18 months. It had hired consultants McKinsey and Goetzpartners to help it cut a €6.2 billion debt (more than six times its earnings), "which credit analysts had labelled 'unsustainable,'" according to the report. Its new deal with ZTE was expected to help the company.
According to the article, "[Digicel] has hired ZTE to work on revamping its networks. Digicel began as a mobile operator but has had to move into broadband, which requires fibre-optic cables, and other telecoms services, to maintain its position in its various markets...Digicel has spent $1.65 billion over the last three years building a fibre network and boosting its mobile broadband."
Caribbean360 provided a few details about the deal with ZTE when it noted that the agreement was "an ongoing multi-year network upgrade programme, the largest network transformation ever undertaken by the telecoms firm. The deal was signed on February 9 in China by Digicel Chairman Denis O'Brien and Chairman and CEO of ZTE Dr Zhao Xianming." Yet the article provides details about ZTE's troubles with the United States government.
**ZTE
Digicel's worries seem to pale in comparison with those of ZTE. According to Caribbean360, the US began investigating the company in March 2016 and ZTE "recently got a slightly longer reprieve from export restrictions imposed by the US government over the issue."
Further details are provided by Barron's Asia in a post from April 2017: "U.S. authorities slapped ZTE with export restrictions...on allegations that the company had sold equipment to Iran while the country was still under international sanctions. ZTE shares fell as much as 40% in the weeks following the announcement of the ban as the U.S. is the second largest market for the company... However, the threat never manifested into actual punishment as ZTE was granted a series of reprieves before the ban was lifted last month. The company was ultimately ordered to pay a fine of up to $1.3 billion for its violation."
In providing a little bit more about ZTE's partnership with Digicel, the South China Morning Post reported in April 2017 that the deal was not particularly large, but it was significant for ZTE. The article quoted equity analyst Edison Lee: "ZTE recently landed a deal for an undisclosed amount with mobile network operator Digicel...ZTE indicated the contract was not very big, but we believe the significance is that Digicel is a new customer, and ZTE very likely displaced, at least partly, the original vendor Ericsson. This is the first international contract awarded to ZTE after its US export ban was lifted."
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To wrap it up, after searching extensively through a variety of reputable publications and data, a direct answer to your question is not publicly available. However, I did learn of Digicel and ZTE's individual problems and probable impetus for making the partnership, as well as a few small details about the deal.
I did appreciate the opportunity to research these companies and their efforts in telecommunication, and I hope the summaries, data, and links I have provided will prove to be useful in your endeavor. Thank you for choosing Wonder for your research needs, and please let us know if we might provide further assistance.