ZTE looks for 70pc overseas sales boost
The mainland's No2 telecommunications equipment supplier, ZTE Corp, is targeting an aggressive 70 per cent increase in overseas sales, to US$1 billion, as part of its plan to beef up foreign expansion.
'The key revenue growth driver will be our wireless solutions,' a ZTE spokeswoman said. 'Both GSM and CDMA network equipment sales are expected to be growing strongly to developing countries in Asia-Pacific, Africa and Middle East.'
ZTE's boldness comes amid growing optimism surrounding the telecoms market in Asia-Pacific.
Asian telecoms carriers were expected to spend 9 per cent more on capital investment this year, after a five-year decline, because of improving market conditions, research firm Gartner said.
The Shenzhen-listed company's plan emulates that of close rival Huawei Technologies. ZTE hopes robust overseas expansion, which accounted for 20 per cent of the firm's sales revenue last year, will bolster the group's total earnings.
'We've been building our bases and brands in overseas markets over the past few years. This is the time to pay back our investment,' the spokeswoman said.
Like Huawei, ZTE has been selling mobile network equipment and handsets to developing countries for up to 30 per cent less than well-established competitors such as Ericsson and Motorola.
In return, the mainland vendors saw last year's overseas sales double amid slower growth in domestic telecoms spending.
Last year, ZTE's sales to overseas markets amounted to US$610 million, while total sales grew 50 per cent to $3.46 billion.
Huawei's exports last year doubled to US$1.05 billion, with total sales up 35 per cent at $3.5 billion.
Analysts said the Chinese vendors had enjoyed a price advantage over global competitors when competing for contracts in emerging markets as these markets were largely price sensitive and were neglected by the major players.
