Chinese telecommunications equipment vendor ZTE Corp. (0763.HK) aims to grow its global terminal shipments including handset, tablet and wireless data cards, by 40% this year as it is pushing its way to become the world's No. 3 handset vendor by 2013, an executive said Thursday.
The Chinese company, which is looking to make a big push into the booming U.S. smartphone and tablet market, also plans to launch its first batch of smartphones and tablets in the U.S. with carriers in the second half of this year after making good progress in the European and Asian mobile internet device markets.
Traditionally, ZTE has been known to supply low-cost telecom equipment such as base stations to companies such as China Mobile Ltd. (CHL, 0941.HK) but it is also keen on beefing up its devices business.
"U.S. market is important to us because one-fourth of the global telecom market's revenue comes from the U.S.," Cheng Lixin, chief executive of ZTE's U.S. operations told Dow Jones Newswires in an interview. "We are committed to the U.S. market but we want to be treated fairly by the U.S. government."
ZTE is already offering either feature phones or wireless data cards to the top four U.S. carriers comprising Deutsche Telekom's (DTE.XW) T-Mobile USA, AT&T Inc. (T), Sprint Nextel Corp. (S), and Verizon Wireless, a joint venture between Verizon Communications Inc. (VZ) and Vodaphone Group PLC (VOD, VOD.LN), but it still can't supply network equipments to the major American operators because of political reasons, said Cheng.
"We were excluded from the bidding (for Sprint's network upgrade contract) even the carrier gave high scores to our equipments. We felt disappointed with the unfair treatment," he said. "We will continue to communicate with the U.S. government to make them understand ZTE is a transparent public company."
Last year, China's ZTE and Huawei Technologies Ltd. were named in a letter to the Federal Communications Commission when four U.S lawmakers pressed the agency to take a closer look at Chinese telecom-equipment makers and consider restrictions that would make it harder for them to do business in the U.S.
The letter--signed by Sens. Jon Kyl (R., Ariz.), Joseph Lieberman (I., Conn.) and Susan Collins (R., Maine) and Rep. Sue Myrick (R., N.C.)--was sent to the FCC just weeks before Sprint Nextel Corp. was expected to choose suppliers for a multibillion-dollar network upgrade. ZTE and Huawei were among six vendors bidding for the work.
He said ZTE aims to continue to double its terminal shipments in the U.S. market this year by launching third-generation and fourth-generation smartphone and tablet devices with tier-one carriers in North America, but he declined to give more specifics.
The company which makes handsets for U.K.-based Vodafone, Spain's Telefonica SA (TEF), and China Mobile shipped 90 million units of terminals last year, up 45% from a year earlier, said Cheng.
The strong growth brought ZTE to the fourth place in the world's handset market behind Nokia Corp. (NOK), Samsung Eletronics Co. (005930.SE) and LG Eletronics Inc. (066570.SE) at the end of last year, he said.
ZTE is offering touchscreen smartphones based on Google Inc.'s (GOOG) Android operating system. It also makes handsets that run on Microsoft Corp.'s (MSFT) Windows Mobile System.
To speed up its expansion in the U.S., Cheng said ZTE will double its employees in the U.S. this year. Currently, it has about 400 employees, eight sales office and one research-and development center in America.
ZTE also opened its North American logistics center in Dallas last month. The new center is an important hub of ZTE's global distribution network, and will serve more than 20 operators across North America and Latin America, it said in an earlier statement.