The deal between ZTE and France Telecom will be a blow to Sagemcom. The vendor has been the exclusive supplier of the Livebox 2 to the leading French telco since October 2009, having previously shared manufacture of the 802.11g-capable Livebox 1 with Technicolor (formerly Thomson). Nonetheless, Sagemcom still holds deals with other major French ISPs, providing Bouygues Telecom with its 802.11n DSL modem having displaced Technicolor as the main supplier.

For ZTE, according to IHS Screen Digest research, this is the first major deal the vendor has signed with one of the leading French ISPs. The international status of the telco is significant, boosting revenue for the vendor not only from Livebox 2 sales in France but also in Poland, and longer term, potentially Belgium if and when the Livebox 2 appears in the country.

Drawing on data in our Broadband Technology service, vendor revenue from devices sold to French broadband providers in 2010 rose to over €310m, generated by 7.2m units. Sagemcom took the lion's share of this revenue, supplying ISPs with nearly 3.1m units in the year. In total, IHS Screen Digest data indicates that consumer demand for modems and routers in France increased from 8.5m units in 2009 to 10.6m in 2010. 802.11n-capable devices, which extend in-home wireless coverage and support higher data transfer rates than the previous 802.11g standard, grew to 60% of total consumer modem demand in 2010, from 33% the previous year.