ZTE needs to find newer businesses

May 22 2013, 01:12 IST
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SummaryThe US$13.8-billion Chinese telecom equipment maker, ZTE, is the fourth-largest mobile handset manufacturer in the world. ZTE Telecom India is a 100% subsidiary of ZTE

The US$13.8-billion Chinese telecom equipment maker, ZTE, is the fourth-largest mobile handset manufacturer in the world. ZTE Telecom India is a 100% subsidiary of ZTE. ZTE has sold close to 4 million handsets in the Indian market through telecom service operators and indirectly through Indian mobile phone brands. Now ZTE is going solo with the launch of five 3G handset models. ZTE plans to sell 1 million units in the first year and growth at 100% the year after. About a third of the current annual turnover of ZTE India currently comes from handsets, ZTE now wants to take this up to 50%. ZTE India CEO Xu Dejun’s vision is to be among the top three mobile phone players in the Indian market. In an interview with Geeta Nair, Dejun played down the security concerns raised in India over the dependence on Chinese telecom equipment makers, and said they are not a security threat for India. Edited excerpts:

There are security concerns raised over the domination of Chinese equipment markers in the Indian telecom market...

Security issues always comes up, but I don’t think there are any. Ten years before we came into the market, there were companies from US and Europe and these issues were never raised. We are offering similar or better quality at a lower price so security issues have been created. These are gimmicks. We are a company into business. We have build trust with the operators. The Indian government has not stopped us from doing business. About China and India some people always worry but I don’t worry. These two countries must be friends. Premier Li Keqiang is visiting India. The two countries are very close friends. We are following all the regulations. The government policy requires all telecom equipment vendors to submit their equipment for testing. We will be the first one to get our equipment certified.

The telecom industry had a difficult time last year. How was ZTE’s performance?

Last year was difficult. Revenues were down to almost half of the peak. We had done a business of US$ 1.5 billion in 2010 in year 2012 the turnover was down to US$700 million. This year we are seeing a recovery but it will not be close to what it was in 2009. There will be no explosive growth. The operators have reached a health saturation point so they will not be pumping

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