ZTE to close down Indian R&D operations

Telecom Lead Asia: ZTE is closing down its R&D operations in India.

The Chinese telecom equipment and ICT solutions provider is also scaling down its services business in the country to optimize costs amid reduced gear sales, Economic Times reported.

In fact, ZTE is in the process of closing down its non-viable businesses and offices in select countries.

ZTE earlier said it would review its strategies to improve performance in different telecom markets. The restructuring exercise is line with ZTE’s likely net loss of $279.2 million in the first 9 months of 2012.

The Chinese telecom equipment maker, which is under the scrutiny of the US Intelligence Committee on security issues, will review its strategy on products and operations in different regions.

ZTE will allocate more resources to its terminals business in North America and Europe. It will be proactively pursuing opportunities in the wireless and wired broadband segments in emerging markets including China and Asia Pacific.

According to a report in Economic Times, the Chinese networks vendor has reduced a majority of its near-60 strong research staff and asked the few remaining team members, earlier on the company’s rolls, to opt for contract service.

The significant reduction was effected after ZTE India recently merged its R&D set-up in Bangalore with its Indian Engineering & Service Center, which offers engineering support services for multiple telecom projects.

The impact on the company’s services business is likely to be even more severe than R&D as contracts dry up amid reduced networks gear spending by telecom operators.

Five senior executives in the rank of vice president to project director in the services and enterprise sales divisions have resigned last month. They include Dinesh Sharma and Shabbir Ahmed – key members of ZTE’s team managing Airtel’s LTE networks; Ashish Vaishya, a director and member of the services vertical managing BSNL’s cell networks; Rajneesh Sharma, a senior executive in charge of PSU and enterprise sales; and  Arvind Rangnekar, project director in the services division.

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