China s ZTE plans overseas expansion

Vendor targets 50% of revenue from overseas sales by 2008.

Chinese equipment manufacturer ZTE said it plans to increase its presence in international markets in the coming years, and is targeting overseas sales of more than 50% of total revenue by around 2008.

According to Cui Yi, vice general manager for international marketing at ZTE, who was speaking at Telecom World in Geneva, the vendor, which claims to be the largest telecoms manufacturer in China, will achieve overseas revenue of some US$500 million this year, more than double last year s figure.

Currently, the company achieves 75% of its sales in China and 25% from foreign markets. Total sales by 2008 are expected to be around US$10 billion.

"The long-term strategy is to become an international company," said Yi.

So far ZTE has set up offices and subsidiaries in around 50 countries. By the end of this year it will be present in 70 countries, Yi said.

"We want to establish long-term partnerships with countries," he added. This will involve employing people in local markets and developing technology to suit local requirements.

By increasing its international presence the company will become more of a competitor for the large European vendors.

"Compared with Europe we have an advantage because of the lower cost of salaries in China," added Shi Lirong, senior vice president at ZTE.

ZTE develops wireless infrastructure systems based on GSM, UMTS and cdma2000 technologies.

The company said it also plans to combine WiFi technology with its mobile systems, although ZTE director Sun Zhengge added that wireless LAN in China is still at a very early stage.

He noted that laptop usage is still relatively low in China, as opposed to mobile phones.

Shi Lirong added that there are currently 250 million mobile phone users in China.

He said ZTE has a 15% share of the domestic CDMA market, while its GSM equipment is present in 25 Chinese provinces.

Overseas the company has deployed GSM technology in more than 20 countries, while it has installed 9 million CDMA lines worldwide.

China has yet to award its 3G contracts, but ZTE said it is prepared for all eventualities since it has both cdma2000 and UMTS technology.