The Hindu Business Line : ZTE may set up telecom gear plant in Chennai

New Delhi March 22 In a bid to take on the dominance of European equipment providers such as Ericsson and Nokia, Chinese telecom gear manufacturer ZTE Corporation is embarking on a major expansion plan in India, including a second manufacturing unit, and increasing its headcount to 800 by end of 2007. While the company already has a unit in Manesar, ZTE is now mulling another plant, probably in Chennai, especially for manufacturing broadband equipment.

Speaking to Business Line, Mr Huang Da Bin, CEO, ZTE Telecom India Ltd, said, "India is the biggest market for us outside China and we are ramping up operations here. We are eyeing revenues of $600 million from India this year compared to $220 million in 2005. We have plans to set up manufacturing in India, which will be finalised after we discuss it with our clients and the Government. Chennai is one possible destination for setting up the unit. "

ZTE has already declared India as its key market and has made its unit in the country as a stand-alone entity. The company is increasing its employee base from 500 to 800 this year.

Earlier, ZTE opened a flagship factory and R&D centre in Manesar, near Gurgaon. The facility covers an area of more than 4,000 sq.m and ZTE is using the facility to manufacture telecom equipment as well as handsets.

While ZTE has bagged some major contracts from the public sector telecom majors, it has not been able to break into the private sector where the likes of Ericsson and Nokia dominate. "We have experience from China where the European manufacturers started dominating the equipment market initially but then at present ZTE has captured a significant share. We hope to replicate our success in India too," said Mr Bin.

ZTE is hoping to get a larger pie of the Indian market by using pricing as a key strategy. "Every operator wants to deploy a cost-effective network. In China, the cost of R&D and manufacturing is very low because of which we can offer low-cost but high-quality solutions, which is what Indian operators are looking for," said Mr Bin.

The company is also looking to launch its GSM handsets in the country this year. At present, ZTE is quite strong in the CDMA handset segment with major deals with operators including Reliance Communication and Tata Teleservices. ZTE equipment currently account for 85 per cent of BSNL's CDMA network.

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