ZTE plans mobile market expansion

ZTE, the Chinese telecommunications group, is aiming to expand its share of the US mobile phone market "step by step".

He Shiyou, executive vice-president in charge of the group's handset division, said: "We want to increase our handset revenues in the US to represent more than 50 per cent of our US sales."

Currently, sales of network infrastructure equipment account for about 70 per cent of ZTE's US revenues.

Mr He was speaking after ZTE launched two mobile phones for the US market during the CTIA Wireless Show in Las Vegas.

Both phones are designed to work on CDMA (code division multiple access) networks, including those operated by Verizon Wireless and Sprint Nextel.

ZTE is the sixth-largest global mobile phone maker but has established a strong position in the Chinese domestic handset market and in the world market for network infrastructure.

It claims to have won 43 per cent share of the CDMA infrastructure contracts signed last year and was chosen by Sprint Nextel to help build the US carrier's proposed wireless broadband network based on WiMax technology.

Mobile handsets accounted for about 20 per cent of ZTE's global revenues last year, a figure Mr He said is likely to rise to about 30 per cent in 2008. "Our handset business is growing rapidly," he said, but he says that, "in the US, we are newcomers".

ZTE is also determined to expand its operations in emerging markets and in Europe, where it is targeting sales of 3G handsets.

In the US, the company will focus on selling higher end mobile phones with multimedia capabilities, Mr He said, and will work closely with carriers rather than the consumer market.

ZTE had been mentioned as a buyer for Motorola's lossmaking mobile phone operations. But while Mr He said ZTE was approached by "third parties" about a deal, he said it was not interested. "We want to build our own brand."

Industry analysts believe ZTE may also have been reluctant to risk the political hostility that a Chinese bid for Motorola's handset business might have stirred up.