ZTE eyes $1 bn turnover from Indian operations

Chinese telecom equipment firm ZTE is targeting a $1 billion turnover from the Indian operations this year on the back of new orders from the new operators who are planning to launch services and increased shipment of mobile handsets. However, the company has ruled out setting up a manufacturing base in India due to cost advantage in China.

“Cost of manufacturing is still high in India... also sales have to come to a certain level before we can think of setting up a plant in India,” ZTE Corporation executive vice-president, He Shiyou told visiting Indian journalists recently. “We have the capability to set up manufacturing facility in India but the cost advantage is still in China,” he added. With 9-10 new operators set to start mobile service throughout the country, ZTE has started talking to all of them and in fact some of the players, including Russian telecom giant Sistema, which has partnered with Shyam Telelink, has already finalised the Chinese firm as a vendor for its pan-India roll-out of CDMA network.

ZTE has a research and development (R&D) facility in India besides a post-sales repair and maintenance factory.

Speaking about the company’s handset business, Shiyou said that shipments to India this year would cross the 15-million mark. Last year, ZTE supplied 10 million handsets. In fact, ZTE has a target to make 50 million handsets in 2008 and deliver over 15 million of these to India.

Currently, the company has been selling handsets only in partnership with mobile operators both in GSM and CDMA categories, but it has plans to start selling in the open market in the near future.

“Right now, we are focusing on selling handsets to operator, but we will start selling handset in the open market after we have the opportunities,” Shiyou said.

ZTE has a long-term contract with Vodafone for selling handsets in the Indian market and the company is not immediately looking at similar partnerships with other mobile operators in the GSM segment. In the CDMA segment, it provides handsets to Reliance Communications, Tata Teleservices and BSNL.

Asked whether ZTE will be bidding for the 90-million GSM lines expansion proposed by state-owned Bharat Sanchar Nigam Ltd, ZTE officials said the company has already initiated the process and assured to put in its bid for BSNL’s tender. On ZTE’s strategy that whether the company would bid aggressively for the tender, the officials said, “There is severe competition in India....

Rishi Raj