China Telecom has handed ZTE a 40% share of a 4 billion yuan ($629.3 million) broadband equipment procurement project.
The project, which is expected to be the largest in the world this year, will see China Telecom purchase PON OLTs, FTTB MDUs, and broadband terminals totaling around 21 million units.
ZTE has taken the lion's share of this year's contracts for the upgrade, which forms part of the Chinese government's ambitious Broadband China project.
Through the project, China Telecom aims to increase its FTTH coverage to 55 million households and FTTH subscriber base by around 25 million.
The operator anticipates its total subscriber base will grow by 16 million as the result of the broadband increased capacity, to top 100 million.
China Telecom has this week also contracted Alcatel-Lucent to deploy IP/MPLS technology to support the network expansion.
The government has announced a goal under the Broadband China project of having over 250 million households served by high-speed broadband connections by 2015.
The project also targets 35 million new FTTH connections this year, and calls for 50% of China's broadband customers to have speeds of 4Mbps or higher by the end of the year.