ZTE looks to cut out the middle man in bid to raise sales in India

ZTE, the Chinese mobile handset and telecoms infrastructure manufacturer, plans to boost its presence in India by supplying 15 million handsets this year and increasing turnover to US$1 billion.

ZTE currently sells handsets in partnership with GSM and CDMA mobile operators, but is considering bolstering sales by directly marketing handsets under its own brand.

Despite increasing Indian supply from 10 million to 15 million handsets, ZTE does not plan to open a manufacturing plant in India yet.

“If we feel that the timing is right, we could directly sell low-cost ZTE handsets in the Indian market by as early as this year-end,” ZTE’s executive vice-president, He Shiyou said.

Last year the vendor manufactured 30 million handsets, of which 10 million were supplied to India, and resulting in country sales of US$750 million.

ZTE is looking to produce 50 million handsets worldwide this year, targeting the low-end segment with large sales volumes.

However, even though the company is ramping up supply to India, Shiyou said it is still more cost-effective to ship from China than to open a manufacturing facility in the sub-continent.

“Cost of manufacturing is still high in India as compared to the option of importing equipment from China. Sales have to come up to a minimum level before we can think of setting up a plant in India,” Shiyou said.

ZTE also sells GSM, CDMA, broadband, WiMAX and IPTV solutions, and has a research and development facility in India, besides a post-sales repair and maintenance factory.

Russian telecoms giant Sistema has partnered with Shyam Telelink for a pan-India CDMA network and has confirmed ZTE as its vendor for the network.

ZTE officials have also confirmed the company will bid for the contract to supply 90 million GSM lines proposed by state-owned Bharat Sanchar Nigam Limited (BSNL).