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Top10 Vendors: 10 - ZTE: Pricing Pays

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VoicenData Bureau
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The FY '06-07 was an exceptionally good year for ZTE India and its aggressive

pricing strategy paid off. Having done well internationally, the company was

banking on India and finally things started to look rosy. The company did well

vis-à-vis all its Chinese counterparts as it delivered a three digit growth and

entered the "Top 10 Club" of Voice&Data.

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The Indian strategy was focused on innovation with respect to price, product,

and features. The company did well on all fronts-wireless infrastructure, mobile

handsets, optical transmission, and broadband. In FY '06-07, the company

registered a turnover of Rs 2,596 crore, showing a stupendous growth of 123%. In

wireless infrastructure, the company bagged a large rural order from Tata

Teleservices to build a countrywide CDMA2000 network over the next three years.

From Reliance Communications, the company bagged CDMA as well as GSM BTS orders.

The company bagged a key order from Spice to provide wireless infrastructure and

transmission.

ZTE has also done well in handsets, bagging large orders from Reliance and

Bharti. In the GSM space, the company is supplying products under the Spice

brand name and in CDMA, through Reliance Classic. The company is actively

focusing on all segments. ZTE India is also planning to launch dual mode phones

in the Indian market in 2007. The company has also done good business in data

cards.

In transmission, ZTE received an upgrade contract for DWDM from BSNL and also

supplied equipment to Spice. In DWDM category, ZTE deployed a high capacity 400G

and ROADM systems, and in SDH the focus was on RPR (resilient packet ring)

technology. The company was equally strong on broadband and received a large

order from BSNL where it is one of the three players along with UTStarcom and

Siemens. The company also bagged an NGN order from MTNL.

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AREA OF OPERATION:



Transmission, Handsets, Wireless

Infrastructure and Broadband



Address:
ZTE Telecom India



2nd Floor, Tower - A, Global Business Park, Gurgaon — 122001


Tel:
0124- 4323000



Fax:
0124-4067329



website:
zte.com.cn


Highlights

  •  Received

    an upgrade contract for DWDM from BSNL

  • Doing 3G trials with Aircel in South India

  • Registered Rs 88

    crore revenue from its DSL business

  • Bagged large orders

    from Reliance and Bharti for handsets

  • Won orders from

    Reliance for CDMA as well as GSM BTS

The company has an R&D center in Manesar covering a space of 4,000 square

meter where plans are on for manufacturing handsets and infrastructure

equipment. ZTE is also planning to set up another manufacturing base for which

the company is negotiating with different state governments. The timing and

location of the factory will depend on business volume. The factory is expected

to be finalized by 2007 end.

We have given an Indian face to the company and this

provides comfort and confidence to our

How would you rate ZTE's performance in FY 2006-07 vis-à-vis

the previous fiscal?





ZTE India has made significant progress in wireless, handset, and
transmission segments and all this is followed by innovation. We have taken

advantage of R&D and improved our product portfolio. In terms of revenue,

ZTE India has clocked Rs 2,596 crore. On the other hand, India has also

contributed significantly to ZTE's worldwide revenues.

ZTE's focus was on pricing, product, and features, and it is

is planning to improve on it. In the broadband space, the company bagged

large orders from BSNL and is one of the three suppliers.

Dr DK Ghosh

chairman and managing director

ZTE is strong in CDMA handsets, but what's your strategy for

GSM?



In India we sell GSM handsets through private operators. We have a
tie-up with Spice, Bharti and Reliance. We are not doing any branding for

our products and it is being taken care of by the operators.


How do you plan to consolidate your India operations?



First of all we have given an Indian face to the company and this

provides comfort and confidence to our customers. We are trying to build a

strong service support organization by providing high degree of technical

capability. We also plan to increase manpower from 700 to 1,000 in a couple

of months.

In 2007-08, India will see a lot of 3G deployment. How is

ZTE positioned for 3G?



We have started trials for 3G with Aircel in South India, and are in

talks with other operators.

On innovation, what are your latest offerings?



We plan to launch dual mode handsets that support CDMA and GSM, GSM and

GSM, and CDMA and CDMA models. We also plan to launch new models of data

card in 2007.

What are your plans for FY '07-08?



In 2007, plans are to migrate existing circuit switched networks to next

generation networks. ZTE India has bagged NGN orders from MTNL and plans to

build on it for other operators. We are talking with state governments for

SWAN (state wide area network) implementation through public sector units.

India is the biggest market for ultra low cost handsets (ULCH) and our

target is to capture a major share of the ULCH market.

What's your plan on manufacturing handsets and

infrastructure equipment in India?





We have a facility in Manesar but it is not big enough to grow our expanding
requirement. We are in search of another facility in India for which

deliberations are on with the state government. The timing and location of

the factory is dependent on business volumes. We plan to finalize it within

six months.


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The low point for ZTE was that it got disqualified from a BSNL tender worth

Rs 20,000 crore for procuring and installing GSM network of a capacity of six

crore lines as they failed to meet the stringent technical criteria stipulated

in the tender.

In 2007, the company is banking strongly on 3G and has done trials with

Aircel in South India.

On the managed services front, ZTE is signing up with Spice in Karnataka and

Punjab. The company is actively looking at SWAN (state wide area network) and

has tied up with public sector units for building the ICT infrastructure in

different states.

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With strong growth planned for FY '07-08, the company is planning to increase

its headcount from 700 to 1,000.

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