EXCLUSIVE INTERVIEW: ZTE is upbeat on Nokia’s intention to acquire Alcatel-Lucent and believes the combination will create more opportunity, since operators will have a more limited selection but will still need gear from multiple vendors.
David Dai Shu (pictured), ZTE’s assistant to the president and global spokesperson, expects the blockbuster €15.6 billion acquisition to help it in the bidding process as operators want to keep a balanced supply chain. He noted that operators are looking for integrated solutions, which take a lot of time to develop.
In an interview yesterday with Mobile World Live, Dai Shu said: “There will be two foreign vendors and two Chinese. We will be able to gain market share because the field has narrowed from five to four. Now we believe we can narrow the gap. Our goal is to be number 3 within five years – maybe less. We were [before the announcement] looking to move into third place at the end of this year.”
The Shenzhen-based company rebounded in 2014 after a couple of years of weak growth. Its revenue increased 8 per cent last year to CNY81.5 billion ($13.1 billion), with a net profit of CNY2.63 billion – up 94 per cent from 2013.
Dai Shu said growth this year will be better than last year, forecasting revenue to expand at least 15 per cent as the domestic 4G market continues to be the main growth driver.
Last year ZTE supplied 35-40 per cent of the 4G wireless gear for the country’s three mobile operators, and while it can’t predict the exact figure for this year, the percentage will likely be about the same, he said.
“China is the biggest 4G market in the world and China Mobile is the biggest single network in history. We see a window for growth of at least two to three years.”
He argued that the situation in China is not the same as in the US – where the 4G network can be built out in a couple of years — because of the country’s much larger population and the fact the current level of broadband in much of China is less developed.
With mobile traffic expected to double each year, he said this current level of growth is sustainable for the near future. And once the 4G network is completed, he believes the next wave of growth will be fuelled by a national broadband project.
Demand for fibre and optical equipment also has been expanding quickly.
The ZTE man added that the company has seen a strong uptick in demand in international markets from the second half of last year. “We’ve been able to penetrate new markets which we’ve previously had difficulty entering.”
These include Pakistan and India, where it plans to announce some big contracts soon, as well as in South American and Europe.
He noted that after China Mobile’s massive 4G deployment in just 12 months, potential customers are now more confident about ZTE’s ability to deliver both 4G and other network gear on a large scale and tight timeframe.
China accounts for about half of revenue, but overseas revenue will soon outpace domestic sales, he said.