ZTE sales rose by 50 per cent in 2007

ZTE of China claims it recorded an extraordinary 49.8 per cent rise in revenues for 2007, to hit a total of US$4.928 billion. Net profit was US$177 million, up a remarkebale 63 per cent.

The Shenzhen-based manufacturer says that it made just over US$2 billionn(that's 42 per cent of its total sales), in the domestic market, up 13.8 per cent. from 2006. The telecoms equipment manufacturer says it "continued to implement the strategies of product differentiation and cost leadership heeding development trends in the domestic communications market. At the same time, it strengthened ties with domestic mainstream carriers in China by providing them with quality products and services."

Growth though was fueled by an astonishing 95 per cent rise in revenue overseas. ZTE says, "The revenue growth was driven by continued growth of income from emerging markets and increased sales in developed countries." Africa has now become the most significant market for the firm after China and Asia.

Hou Weigui, the chairman of ZTE, says, "Wireless communications business continues to be our main income source. On the 3G business front, our TD-SCDMA wireless network and core network products secured significant shares of the tenders for the construction of extended trial network for TD-SCDMA large-scale network technology application of carriers. Our UMTS products also gained grounds in the international market and assumed a more premium market position."

Wireless products accounted for 43 per cent of ZTE's sales and handsets for an additional 22 per cent.

The firm also reported that it obtains its highest gross margins from wireless network sales.

Mr. Hou adds, "In the coming year, there will be opportunities as well as challenges in the domestic communications market as carriers transform their businesses and competition in the global market intensifies. The group will step-up effort to grow itself into a mainstream global operator, to develop new products and also tighten ties with major domestic carriers in China. It will seek to ride on the China 3G market, the booming handset and optical communications market as well as the strong global market to sustain fast growth."

ZTE's strong 2007 performance matches that of Huawei Technologies, which saw its 2007 sales rise 45 per cent to over US$16 billion.

By contrast, Western vendors had relatively feeble 2007 results: Alcatel Lucent revenues fell 2.5 per cent, Motorola sales fell by an "unacceptable" 15 per cent while Ericsson was up just four per cent. Nokia though maintained its c sectoral lead with 24 per cent.