Retail giant Alibaba is reportedly nearing a deal to obtain ZTE’s software subsidiary, ZTEsoft Technology.
After months of negotiations, acquiring the unit would help Alibaba improve its relationships with operators while also offering a boost to its cloud business. The e-commerce firm is reportedly willing to pay between CNY2 billion ($294 million) and CNY3 billion for ZTEsoft.
With ambitions to compete with firms such as Amazon and Microsoft in the cloud computing space, Alibaba has evidently been attracted by ZTEsoft’s track record. The division delivers its software support services to operators globally, reaching over 550 million subscribers via more than 120 operators throughout Africa, Asia and Europe. Its largest clients include KPN and Orange.
For its part, ZTE will likely welcome the cash injection after incurring a $1.2 billion fine from the US government issued for trade sanction violations. The Chinese firm is also looking to surpass rival vendors Erisson, Huawei and Nokia in terms of 5G development, and is accordingly funnelling investment towards this.