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Bangalore, Dec 2 Chinese telecom firm ZTE Corporation is reconsidering plans to manufacture CDMA equipment in India with local partner ITI Ltd, but said would scale up its R&D operations for developing new products to cater to the rising demand for value added services (VAS).

Mr D.K. Ghosh, Chairman and Managing Director of ZTE’s India operations, said it was not commercially viable to manufacture the telecom gear locally now as it was cheaper to import. “We are rethinking on our plans and it depends on the business viability,” Mr Ghosh told a press conference.

ZTE had tied up with ITI way back in 2003 for indigenising equipment in India. Revenues of ZTE, which has been operating in India for past nine years, touched the targeted $1 billion for the year-ended September 2008, clocking a 30 per cent growth over previous year.

India, which accounts for about a tenth of ZTE’s worldwide revenues, is a fast growing market for global telecom equipment vendors where cellular operators are adding eight to nine million subscribers a month. Operators are focused on offering VAS to earn more revenues as their average revenue per user comes down while the capital expenditure and the operational expenses are on the rise.

“Orders have not slowed down,” Mr Ghosh said adding the backlog ranged between $3-4 billion spread over multiple years. However, ZTE faced an outstanding of close to 30 per cent of revenues as couple of customers were yet to pay up due to the present market conditions and currency volatility, he said.

Further, ZTE plans to add about 100 engineers to its R&D centre in Bangalore next year.

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