ZTE to stay ahead in 2013 thanks to 3G, 4G and smart devices

Telecom Lead Asia: ZTE says optimization of 3G networks, deployment of 4G networks and demand for smart devices will aid the telecom gear maker to stay ahead in 2013.

ZTE has posted $13.54 billion revenue in 2012, down 2.4 percent and net loss of $460 million.

Relying on 3G and 4G Capex means that the fifth largest gear maker will continue to rely on China — where massive investment in 3G and 4G by China Mobile and China Telecom is happening — to sustain in the telecom infrastructure business which is dominated by Ericsson at present.

Also, ZTE is not investing heavily in acquisitions. Ericsson is investing in software business. ZTE’s strategy is to focus more on research and development, despite pressure on margins.

Recently, Oracle announced its decision to buy Tekelec to increase presence in telecom software business.

Though ZTE is talking about gaining from 3G and 4G deployments, its strategies are silent about its action plan in markets in the U.S., India, etc. where its sales from telecom operators impacted due to security issues.

Also, ZTE is not commenting on its specific plans to boost revenue from enterprise business.

ZTE in a statement said: “In 2013, the rapid growth in mobile internet is driving investments in the optimization of 3G networks, and the deployment of 4G networks. In wireline, government support for bandwidth expansion in many countries will drive investment in broadband infrastructure.”

The increase in wireless and wireline data traffic offers opportunities for growth in transmission networks. Global market demand for smart devices will continue to grow strongly, as more users access the mobile internet to look for richer content and applications.

To serve the changing needs of major telecommunications operators, it is key for providers to offer integrated solutions to maintain long-term partnerships. The competitiveness of ZTE’s products will allow the company to deepen our relationship with customers globally, said ZTE in a statement.

ZTE’s product strategy will remain focused, and will strive to improve efficiencies in research and development efforts. The company will leverage on existing strengths, and actively develop enterprise and government ICT solutions operations.

In 2012, ZTE executed its strategy to penetrate major countries and consolidate business relationships with mainstream international telecom operators, and expanded in newer operations such as enterprise networks and managed services.

In 2012, ZTE saw an improvement in its business mix. Combined revenue for Europe and the Americas increased 1.6 percent from a year earlier, after strong growth in sales in the United States market.

In the Asia Pacific market, revenue increased 2.8 percent. In the network infrastructure division, the company shifted towards higher-margin business. In the terminals division, the mix shifted towards smart devices.


Arvind Krishna

[email protected]

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