ZTE sees local curbs as short-term blips

HONG KONG: Chinese global telecom player ZTE Corporation’s plans to expand the range of its services in the Indian market have in recent times faced a trans-Himalayan hurdle. Although a 100% subsidiary, ZTE Kangxun Telecom Company India, has been operating for some years now, and counts state-owned and private telecom service providers among its clients, ZTE finds itself boxed in from time to time.

 

Its applications to the Foreign Investment Proposal Board (FIPB) for permission to inject more equity capital and expand its range of services have made little headway.  Now, however, ZTE appears to have gained some room to spread its wings. Last month, during Chinese President Hu Jintao’s visit to India, ZTE entered into a strategic alliance with BK Modi’s MCorpGlobal to set up a joint venture that will import and sell telecom equipment, as well as offer telecom-related services.

 

ZTE vice-president Chen Jie, who spoke to DNA Money on the sidelines of the ITU Telecom World 2006 in Hongkong, is confident that the Indian restrictions will ease n due course. “In our view, India is a very big market and it will be so in the future as well. All these kinds of restrictions and concerns will be there only in the short term. From our company’s point of view, we are full of confidence that we will succeed.”

 

Chen Jie and Huang Da Bin, another ZTE vice-president, talked to DNA Money on the Shenzhen-based company’s prospects. Excerpts:

 

 

Huang Da Bin. For ZTE, the overseas market is a strategic market. During the last half year, we won many contracts in international markets, particularly in big markets like India, Russia and Indonesia. This year we will register about 40-50% increase in overseas markets business. Of all of ZTE’s single-country markets, India is the biggest.

 

 

Huang. In India, we get contracts from BSNL, MTNL, Reliance and the Tata group. The product range covers CDMA systems, GSM systems and mobile phones.

 

 

Huang. The contract is for CDMA and GSM systems and 2.5 million handsets. We will announce other details to the media later. We cannot give accurate numbers today.

 

 

Chen. We will do everything according to what Indian policy allows and what operators ask according to their projects… It’s all market-driven. We open our doors to every possibility.

 

 

Chen. Of course, 3G is a big opportunity for everybody, but even if it doesn’t come through next year, the company will be successful in other areas. We offer a lot of solutions. Also, as a global player, we are much stronger than before. For the past year, we have built a foundation that will give rich returns in the coming years.

 

 

Chen. We’ve done everything that’s needed. We do everything according to requirements.

 

 

Chen. We see a bright future from our global initiatives. We have what it takes. We have been working very hard to build the ZTE brand. Today, our brand is more familiar, more famous than it used to be. We currently operate in more than 130 countries, and new markets are always opening up.

 

 

Chinese telecom group has supplied equipment to BSNL, Reliance and Tatas

 

JV with BK Modi’s MCorpGlobal will import and sell ZTE wares and services

 

Contract with Reliance for CDMA & GSM systems &handsets