ZTE says in talks with Sprint on WiMax handsets

BARCELONA (Reuters) - Chinese phone maker ZTE Corp said it is in talks with Sprint Nextel about supplying the No. 3 U.S. mobile service with a range of handsets for a high-speed wireless service it is planning based on WiMax.

"The negotiations are going successfully," Xiong Hui, a marketing vice president for ZTE's handset division said through a translator in an interview with Reuters at the Mobile World Congress.

Sprint has said it would offer services based on WiMax in the coming months. The company has been criticized for its plans to spend $5 billion by 2010 on a network based on a relatively new technology.

ZTE is a relatively small player in the mobile phone market but it has been growing rapidly in the last few years by offering low-cost phones. So far it has a very small presence in the U.S. market. It recently announced that it would sell a device at low cost service provider MetroPCS Communications Inc.

Hui, who declined to comment further on the Sprint talks, said that the U.S. market is key to ZTE's plans to expand beyond China, its biggest market.

"Our target market is the global market," he said. "The U.S. market is a very important market for us."

It aims to increase its devices sales to more than 50 million units in 2008 from about 30 million in 2007, including wireless data cards and phones, he said.

Hui said the company aimed to be one of the world's top five mobile vendors in the next three years.

The market is currently led by Nokia Oyj who shipped 133.5 million handsets in the fourth quarter alone.

(Reporting by Tarmo Virki and Sinead Carew; Editing by Derek Caney)