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In the Big League

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VoicenData Bureau
New Update

ZTE recorded a revenue of Rs 3,000 crore last fiscal, up from Rs 2,596 crore

in 2006-07, a growth of 15.6%. Presently, India is the second largest market for

ZTE after China.

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The company recorded growth in all segments of operation-transmission,

handsets, wireless infrastructure, and broadband. ZTE is one of the leading

suppliers of broadband infrastructure equipment to BSNL and also the premier

supplier for the rural projects of BSNL.

In FY 2007-08, it received business worth Rs 400 crore through BSNL;

increased its terminal business by 102.3% in 2007; and recorded a growth of 400%

in the broadband segment.

The main sectors, that contributed to the revenue are CDMA, terminals, GSM,

transmission, and broadband. Main orders for the company in the last fiscal came

from expansion and network transfer requirements from TTSL, BSNL, Reliance, and

Spice. The company also bagged a GSM handset order from Vodafone India and a

CDMA handset order from Tata. Undoubtedly, ZTE seeks to become the country's

leading telecommunications equipment and high-end service provider.

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ZTE 10

The company already has a manufacturing facility at Manesar, and is also

planning for an annual manufacturing capacity of 40 mn handsets, targeting the

global telecom market. Besides GSM and CDMA handsets, the 30-acre hub will

manufacture WiMax enabled handsets and equipment, BTS switches, and other

telecom components. Though the location is yet undecided, ZTE plans to invest

around Rs 2,000 crore for the project. The company expects another Rs 800 crore

investment from component manufacturers, who will partner with ZTE in the

venture.

As of now, ZTE's handsets are sourced by most of the telecom operators.

However, the company is planning to enter the Indian branded mobile market in a

big way using its brand name.

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ZTE is also scouting for partners to undertake R&D in the area of broadband

and IPTV products, and is believed to be in an advanced stage of discussion with

a private Indian telecom equipment maker.

Competitive pricing, coupled with market differentiation, is part of the

efforts to beat pricing pressure. Also, the primary concern for the company is

heavy competition leading to sharp drop in prices.

With major initiatives like setting up of a manufacturing unit in India and

coming up with its own branded handsets, this fiscal is likely to see the

company further consolidating its position.

We want to become India's leading

telecommunications equipment provider




CEO, ZTE India



Huang Dabin



Address: ZTE Telecom India, 2nd Floor Tower — A, Global Business

Park,



Gurgaon — 122001


Tel: +91-124-4323000


Fax: +91-124-4067329


Website: www.zte.com.cn




Highlights
  • Main orders from TTSL,

    BSNL, RCom and Spice
  • Increased its

    broadband revenue by almost 400%
  • Terminal business

    increased by 102.3%
  • Planning to set up

    another manufacturing unit in India
  • Planning to enter the

    branded handset market
  • Scouting for partners

    to undertake R&D in broadband and IPTV

What were your main achievements in FY

2007-08?



In the last fiscal, our wireless products were deployed in developed

markets. We were also ranked first in terms of the number of new contracts

secured.

With our all IP-solutions, our wireless

equipment launched a full-scale attack on the mainstream MTO markets.

Operators, ranked among the top 35 in the world, have deployed GSM systems.

We also recorded a 300% increase in our delivery as compared to the previous

fiscal. Moreover, ZTE topped the global CDMA market in terms of the number

of CDMA contracts signed for two consecutive years.

What were your main orders in the last

financial year in India?



In the wireless segment, the main orders came from expansion and network

transfer requirements from TTSL, BSNL, Reliance, and Spice; while, in the

terminal segment, we received a GSM handset order from Vodafone India and

CDMA handset order from Tata.

Our target is to become India's leading

telecommunications equipment and high-end service provider.

What are the growth drivers in India?



There are four major growth drivers that spur the telecommunication

market in India. Firstly, the second largest subscriber base, a growing

middle class population and almost 50% of this being under the age of 25

constitutes the basis for rapid growth.

Secondly, a series of government policies and

regulation have optimized India's telecommunication investment environment.

Thirdly, market competition has attracted

many domestic or overseas investors to divide the telecommunication market

both for operators and telecommunication equipment manufacturers.

And finally, India's developed software

industry provides the possibility for overseas manufacturers to directly

invest and establish R&D centers and production bases in India.

What challenges are you facing in the

Indian market?



The fierce competition in the telecommunication industry has brought

tremendous pressure on profits. For long term planning, ZTE has two weapons,

market differentiation and cost reductions, to deal with it. By satisfying

customized demand, market differentiation can increase customer value. Cost

reduction puts forward demands on reasonable distribution of resources.

What is the industry outlook for 2008-09

in India?



In 2008-09, more wireless licenses of different systems are expected to

be issued to anxious operators. Diversified services will provide more

choices for subscribers. For all business operators, a combination of

multiple services will be offered to increase customer loyalty.

In GSM system, LTE oriented SDR, network

sharing, and spectrum enhancement technology will be important functions

developed in wireless infrastructure equipments. Large capacity equipment

catering dense area application, as well as pico-bay station equipment for

flexible networking, will both be feasible evolution directions. An IP

backbone and WiMax backhaul will be widely used in newly built networks,

complementary to optical and microwave transmission.

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