ZTE Corporation is one of China's largest telecommunications manufacturers. The company offers a variety of telecom hardware, including base stations, phones, and systems for switching, optical transport, videoconferencing, power supply, and monitoring. The company is a leading holder of intellectual property (patents) and one of the largest telecommunications equipment exporters in China. ZTE sells to more than 500 telecom carriers worldwide, with customers that include AT&T, Sprint, Verizon, TELUS, China Mobile, and China Telecom. ZTE was founded in 1985 as Zhongxing Semiconductor Co., Ltd.
ZTE has been focusing on globalization, introducing more of its products and services to international markets. In 2011 more than half of sales came from customers located outside of China. ZTE offers its products and services in some 140 countries, with customers in every region, including Asia/Pacific, South Asia, Europe, North America, South America, Africa, and the Middle East. ZTE also operates manufacturing and R&D facilities worldwide, with major production operations located in Brazil, China, Sweden, and the US.
Overall sales for ZTE were $324 million in 2011, an increase of about 27% over 2010. International sales grew 24%, driven in part by sales of 3G smartphone terminals to mainstream global carriers in Europe and the US and in emerging markets including Brazil and India. Sales related to terminals were up nearly 53%, making it ZTE's fastest growing product line, though not its most profitable. In fact, profits for the company fell 34% in 2011. It points to lower profit margins, adjustments to the monetary policy of the Chinese government, and higher operating and finance expenses for the decrease.
ZTE sees an opportunity for growth in the construction of mobile and wireline broadband networks, where growth is being spurred by the mobile Internet and cloud computing. The company is looking to shift its focus from supply of products to integrated product offerings for the government, enterprise, and service market segments, while continuing to offer more in-depth products to the traditional carrier segment.
In 2011 ZTE sold its 51% stake in mobile operator Congo Chine Télécom (CCT) to France Telecom. ZTE will receive an initial amount of $10 million for the stake, with an adjusted price to follow based on CCT financial statements and data at the close of the deal. The sale allows ZTE to exit a non-core business, sidestep competitive conflicts with customers in certain markets, and strengthen its relationship with France Telecom.
A Chinese state-owned manufacturer of telecom cabinets and related products, Shenzhen Zhongxingxin Telecommunications Equipment Company owns a 31% stake in ZTE, and is the company's controlling shareholder. – less