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Chinese firm to make Vodafone phones

Mobile operator Vodafone has signed an agreement with a Chinese company which will produce handsets created particularly for emerging markets.

ZTE Corporation will make a range of what Vodafone calls 'ultra-low cost' phones branded under the Vodafone name.

Meanwhile, Vodafone and Microsoft say they are working together on an instant messaging service that can be accessed from both the PC and mobile phone. The mobile company has also announced a similar agreement with search engine Yahoo.