Dec. 17, 2008 (China Knowledge) - ZTE Corp<000063><763>, China's largest listed telecoms manufacturer, announced that its board has agreed on an expansion plan to set up a software unit Xi'an Zhongxing New Software Co Ltd.

ZTE said the new company is likely to involve preliminary investment of RMB 600 million.

The move is in line with the group's business development strategy, according to the statement.

Last week, the company said it had won RMB 258 million telecom equipment contract from China Telecom<728><CHA>, the nation's largest fixed-line operator.

According to ZTE's statement filed with the Shenzhen Stock Exchange, the company will provide China Telecom RMB 258 million worth of equipment and technical support. In addition, ZTE also won a RMB 4.74 million deal to provide training services to China Telecom.

ZTE also clinched deals with China Mobile<941><CHL> for construction of the fixed-lined internet network in Fujian province, the South China Morning Post reported earlier, citing a senior manager with ZTE, as saying.

A-shares of ZTE lost 4.28% to RMB 26.83 on Tuesday, while its H-shares edged up 4.83% to HK$19.98.