ZTE sees more China growth despite 3G slowdown

Hong Kong:  ZTE, China's No.2 telecoms equipment maker, said yesterday it expected to keep growing in its home market this year, even as many see spending slowing there after a 3G investment spree in 2009.

Last December, China's telecoms regulator said domestic investment in 3G systems reached $21 billion (Dh77.2 billion) in 2009.

Strong 3G spending is expected to continue into this year, but recent plans from China's three major telephone operators have been lower than expected, prompting observers to lower their outlook for ZTE this year.

"This year, domestically and internationally we will achieve this goal of rapid growth," ZTE President Shi Lirong said yesterday. "We are very positive about our development."

China accounted for about half of ZTE's total revenue last year, generating more than 30 billion yuan ($4.4 billion, Dh16.4 billion) in 2009.

Analysts expect ZTE's revenue to grow 24 per cent this year to about 75 billion yuan, slowing from 2009's 36 per cent growth, due in large part to a sharp slowdown in 3G spending in China. "I'm confident the company can maintain a fast growth rate," Shi said of ZTE's broader prospects this year.

Late on Thursday, the company reported its fourth quarter profit rose 50 per cent on strong sales from 3G spending at home and booming exports.

The company and crosstown rival Huawei Technologies have been two of China's biggest success stories, banking on demand from a strong home market and growing success in international markets.

Wide variety of services on offer

ZTE (Zhong Xing Telecommunication Equipment Company Limited) is a publicly-owned, Chinese corporation that designs and manufactures telecommunications equipment and systems.

Based in Shenzhen and established in 1985, ZTE offers a wide variety of telecommunication products that provide services, including value-added services such as video on demand and streaming media, to its customers, which are primarily telecommunications service providers and mobile network operators

ZTE's core products encompass wireless, telephone exchange, access, optical transmission, and data telecom gear, mobile phones and telecommunications software.

ZTE, like many large Chinese companies having its roots in the state, was created in 1985 by a group of state-owned enterprises associated with China's Ministry of Aerospace.