ZTE Corp's booth at an exhibition in Shenzhen. The company has seen an average annual growth rate of 25 percent in Indonesia in the recent years. [Photo/Provided to China Daily]

Company aims to double terminal sales, might move production base

JAKARTA, Indonesia - China's second-largest telecom equipment maker ZTE Corp hopes to double its terminal sales in Indonesia, boosting the proportion of its revenue from terminals to more than 50 percent in the next two years.

After entering Indonesia in 1999, ZTE initially had difficulty breaking into the local market. The situation improved significantly between 2006 and 2007, as the company achieved $200 million in annual sales in 2006 and doubled the revenue the following year.

Fan Xiaoyong, managing director of PT ZTE Indonesia, said the company has seen an average annual growth rate of 25 percent in Indonesia in recent years.

Mobile network infrastructure sales contribute more than half of ZTE's revenue in Indonesia, while terminals, including mobile phones and data cards, account for about 25 percent of total sales.

"Coupled with high-speed economic growth in Indonesia, more and more Indonesians like to use mobile applications, which is boosting the demand for smartphones," Fan told China Daily.

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However, local people are sensitive to price, he said, so the company should respond to market needs by providing more high-quality, low-price smartphones.

The company also installs value-added applications to its smartphones. For example, it designed and pre-installed an application that produces alarms for daily Islamic prayers in the country with the most Muslims in the world.

Indonesia has a population of 238 million, behind to China, India and the United States. It boasts a 20 percent to 30 percent annual growth rate for smartphones, which creates a business opportunities for ZTE, Fan said.

ZTE now has 800 employees in Indonesia, more than 70 percent of whom are Indonesian.

Fan said every Chinese company has difficulty becoming known when it first comes to Indonesia. "It was not easy for local people to recognize Chinese brands," he said.

So ZTE went to colleges and helped train students to become telecom professionals. The initiative helped more and more Indonesians get to know ZTE, Fan said.

The company also conducted research in Indonesia into products that suited local demand. Meanwhile, it is considering transferring its production base from China to Indonesia. The move would lower its labor costs and simultaneously help ease employment in Indonesia, Fan said.

ZTE unveiled its global terminal strategy in Beijing on Tuesday. It aims to become one of the top five global makers of smartphones running on Google Inc's Android operating system this year.

The company expects to ship 12 million smart terminals worldwide in 2011, almost 90 percent of them smartphones. In the first quarter of this year, it shipped 15.2 million handsets and grabbed a global market share of about 4 percent, according to a report from Gartner.

The Malaysian wireless telecom carrier DiGi Telecommunications Sdn Bhd recently announced it had awarded a contract to ZTE To build a unified mobile network starting in the third quarter of this year. The financial terms of the contract were not disclosed.