Chinese Telecom Companies Seek Global Dominance

Chinese telecom companies, Huawei and ZTE, are attempting to increase their international presence, driven by the Chinese government's policy to promote bigger companies to compete globally. Despite mixed results from similar efforts, such as the unsuccessful bid for US oil company Unocal, ZTE has successfully signed deals with French giant Alcatel and Huawei is in discussions to purchase struggling telecoms icon Marconi.

Key Takeaways:

• ZTE aims to become a truly international company, rivaling major names like Lucent, American Nortel, Ericsson, and Nokia.
• ZTE's sales of handsets and broadband networking gear grew 35% last year, with profits jumping 50%.
• Exports soared 179% for ZTE, with the company's president aiming for overseas sales to account for more than half of revenues by next year.
• Cao Qiang, ZTE vice president, emphasizes the importance of providing high-quality products, not just low costs, to succeed in the competitive market.
• Huawei and ZTE have had broad success in the developing world, but seek to enter top-tier Western markets, producing advanced telecoms equipment and handsets.
• The Chinese telecom companies face challenges in breaking into the Western market, with experts believing it will take 5-10 years before they can successfully enter developed markets.

Statistics:

• 120,000 new Chinese customers subscribe to a cell phone service every day.
• ZTE's profits jumped 50% last year.
• Exports soared 179% for ZTE.
• ZTE's sales of handsets and broadband networking gear grew 35% last year.

Sources:

• NPR's Rob Gifford, "Visit to ZTE's offices in Shanghai" (no date provided)
• ZTE Vice President Cao Qiang, quoted in NPR News (no date provided)
• Zhou Zhen Hua, exposed in NPR News (no date provided)
• Duncan Clark, Beijing telecoms consultancy BDA, quoted in NPR News (no date provided)
• Steve Inskeep, NPR News, "MORNING EDITION from NPR News" (no date provided)