This article is final installment of a six-part online series that culminated with a final analysis feature in Oct. 9 issue of Telephony. The other parts in this series can be found on our WiMAX World page.

ZTE is a mystery. Nobody in this industry is quite sure what the Chinese vendor is up to. It and its fellow countryman, Huawei, have had substantial success in branching outside of their home markets, selling telecom equipment at lower margins to operators in developing countries and even some in the developed world. But otherwise ZTE remains opaque--a shadowy threat from the east.

With the advent of WiMAX as a viable technology, there’s never been a bigger opportunity for the Chinese vendors to break onto the world stage. There are no incumbents in WiMAX, no installed bases--everyone technically begins at the same starting point. Given that Huawei has achieved greater success in the global market place with 3G than its compatriot, WiMAX is probably ZTE’s biggest opportunity to shine in radio access business. The problem is, unlike every other vendor, ZTE isn’t wearing its WiMAX strategy on its sleeve.

“This is where the whole issue of mind share comes in,” said Peter Jarich, wireless infrastructure analyst for Current Analysis. “Every other vendor is broadcasting every minor development or win to the world. We know that ZTE has WiMAX, and it’s probably a good platform. But if I’m an operator, I’m asking, ‘What are they doing with it? Do they even have stuff to trial?’”

Samsung is another Asian infrastructure vendor that is trying to burst the shackles of its home market, but unlike ZTE, Samsung has turned its marketing machine up to full tilt. It launched the first commercial network based on IEEE 802.16e technology in Korea and publicized the hell out of it. Its boutique network at the Turin Winter Olympic Games got similar treatment, and at every trade show or event, Samsung prototype dual-mode WiMAX handsets are in everybody’s face. The Korean vendor is making effort to show not only that WiMAX can work, but that Samsung’s the vendor to deliver it. That kind of plugging away at the technology eventually led to Samsung winning a piece of Sprint’s proposed “4G” network.

ZTE certainly hasn’t been silent. It announced two commercial deployments of fixed WiMAX gear so far, one in Serbia and one in Angola, and its proprietary broadband wireless equipment is used throughout China and some other developing countries. But apart from those deals and few large-scale press conferences to announce its portfolio, the vendor hasn’t made much noise. That could change as opportunities come up in its home market. Beijing is looking to make a big technological splash for the 2008 Summer Olympics. So far it’s planned to meet the Olympians and attendees broadband needs through China’s homegrown Time Division Synchronous CDMA networks, but there is speculation the government may augment that technology with WiMAX. If that were the case, ZTE would be in a prime position to win a contract from a government looking to highlight its country’s technology might. If it were to build that network, ZTE could gain an international showcase, much like what Samsung achieved with its WiBro networks at the Asia Pacific Economic Cooperation conference in Korea and the Olympics in Italy.

ZTE has one of the few major vendors to develop both a fixed and Mobile WiMAX product, targeting wireline broadband replacement and nomadic deployments as well as true mobility. That gives it both a means to compete with all of the Tier 1 vendors targeting the big mobile carriers as well as the smaller vendors focusing on wireless ISPs. It also brings a formidable CPE portfolio to the table, including both home gateways and handheld devices.

“In addition to handsets, it has a full line of switching and optical products,” Jarich said. “There are very few things ZTE can’t do.”

But its breadth of portfolio isn’t the most often cited advantage ZTE has in the market. It’s formidable R&D division and its ability to bring already commercial technologies to the market at lower margins are its main competitive advantages. ZTE has an army of 31,000 engineers in its various Chinese offices, all of which work at a fraction of the cost of their western counterparts. ZTE, however, won’t address the price issue directly. Lance Cornish, ZTE’s vice president of marketing in the U.S., would only say that ZTE will price its gear competitively, but he alluded to the cost advantages China-based R&D gives it in determining that pricing.

“We can be as competitive as we need to be while sustaining our R&D,” Cornish said. “The cost of our engineers is much less, but the quality of our engineers are extremely high. We get good people at a low rate.”

That R&D machine and its accompanying technical savvy is something for other vendors to fear. Unlike with other technologies, carriers are starting from scratch with WiMAX, meaning ZTE suffers no late-to-market disadvantage. A low-cost alternative coming from China could be the perfect excuse carriers need to start looking east instead of west for their newest networks. Motorola Chief Technology Officer Dan Coombes acknowledged that ZTE was a threat, but he said that Motorola and other established vendors still have the initial advantage simply because of their established relationships and experience. He also said ZTE and Huawei might not have the price advantages many people claim. With WiMAX the two vendors aren’t benefiting from years of commercialization of an existing technology like they did 3G and wireline networks. They’re facing the same development hurdles as the rest.

“Obviously our prices aren’t high or we wouldn’t be receiving the orders we do,” Coombes said. “Over time, sure, there will be competitive price pressures. But if we do a good job we’ll not only have high-quality products but competitive prices.”

Even if ZTE is able to undercut Motorola and the other established vendors, carriers won’t necessarily run to its side, Jarich said. WiMAX is a new technology that carriers have no experience deploying. They’ll want a lot of handholding in the early stages, and its still questionable whether they are willing to trust ZTE with that responsibility. ZTE certainly has the manpower and the technical expertise to offer full services and support, but it hasn’t necessarily developed the personal savvy or rapport with western operators that the Tier 1 vendors have. Jarich said he has heard horror stories of communications meltdowns due to language barriers that have made some operators uneasy with Asian vendors. And until recently ZTE was still issuing English press releases riddled with blatant grammatical mistakes that probably did little to assure carriers that communications with ZTE’s engineers would be any less problematic, Jarich said.

“You’ll hear the Chinese companies say ‘if there is a problem we’ll throw a lot of people at it,’” Jarich said. “The question is are they throwing a lot of competent people at the problem or just a lot of people.”

But ZTE is definitely tackling those shortcomings. As it builds up its operations in North America and other western markets, the executives it hires are increasingly occidental ones with experience dealing with western operators. Its marketing communications machine is becoming increasingly fine-tuned and sleek. On the trade show circuit it certainly doesn’t lack for attention.

If ZTE’s continues to improve on those direct relationships with the carriers, it’s not hard to imagine it stealing deals away from its western competitor, especially after the industry is more comfortable with WiMAX, Jarich said. He pointed to Huawei’s recent 3G wins, where it was named a supplier along with a network incumbent like Ericsson. Carriers are growing more accustomed to sticking in part with a known entity but taking a risk on an Asian challenger, he said. It’s an easy extrapolation for carriers to start doing WiMAX deals that involve a Motorola and a ZTE or an Alcatel and a ZTE.