China's ZTE looking at Indian telecom market

China’s second largest telecom gear maker, ZTE, is looking at the Indian market for growth this year as it seeks to recover last year’s $400 million losses.

In 2012, ZTE India posted a small rate of growth, realising revenues of $700 million, around half the $1.5 billion it received in 2009, a write up in the state run China Daily titled ‘ZTE banks Indian telecom market’ said.

ZTE suffered a loss of $400 last year and showed signs of recovery this year with 35.9 percent increase in net profits in the first quarter of this year boosted by gains from selling assets late last year.

Top Executives of the both Huawei, China’s number one Telecom major along with ZTE were reportedly accompanying Chinese Premier, Li Keqiang, on his current tour of India, as part of his big business delegation.

Xu Dejun, CEO of the Indian arm of the ZTE, said he is re-evaluating India's telecom market and has decided to shift focus from telecom equipment to smartphones, which now account for around 10 per cent of ZTE's sales in India.

Xu wants to raise that to 30 percent within a few years. In three years, he added, ZTE hoped to be among the top three smartphone makers in India.

To achieve the goal, ZTE unveiled five new smartphone models last week and announced a partnership with local company Calyx Telecommunications to distribute smartphones in India.

The move came after Huawei Technologies Co Ltd, which made $2 billion profit internationally, launched two new smartphone models in India last month.

ZTE and Huawei accounted for around 30 percent of India's smartphone market in the first quarter of 2013, up from 13.2 percent a year ago, the China Daily write up said.

Another way for ZTE to revitalise growth is to further localise, Xu said.

"We want ZTE India to be an Indian company, not the Indian branch of a Chinese company," Xu said.

Xu was promoted in February to oversee ZTE's entire business in India after working for more than nine years in the country.

Regulatory uncertainties combined with ‘scandals’, including one over the allocation of telecom bandwidth, has dampened growth in India, it said.

In July 2012, for example, India lost 20.5 million mobile phone users, the first time India experienced a decline in mobile phone users.

ZTE has 23 offices throughout India and 85 per cent of its 1,500 staff are hired locally and a third of the management positions are filled by Indians.

ZTE plans to further raise its level of localisation and promote more locals to management positions, the write-up said.

Image: ZTE company logos are seen at an international software and information services exhibition in Nanjing, Jiangsu province | photograph: Files/Reuters