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Shenzhen-based ZTE Corp, a leading domestic telecoms equipment provider, announced yesterday that it has started its localization strategy in India by building a factory there.
"Setting up the factory meets the demands of Indian telecoms operators for differentiated and localized services," said Zhang Renjun, general manager of ZTE's South Asian Region.
"It will also contribute a lot to lowering our costs through local purchasing and manufacturing, and improving our partners' comprehensive competitiveness," he said.
Wholly-owned by ZTE, the factory is located in Haryana, with a total floor-space of 4,000 square metres.
The first phase of the factory has been completed, enabling it to produce a total of 3 million lines of CDMA (code division multiple access) system equipment.
In fact, ZTE has already become one of the leading telecoms network providers for India.
Early this year, ZTE signed a contract worth more than US$20 million with Indian Atlas Interactive Pvt Ltd, the country's largest IPTV (Internet Protocol TV) carrier, to help deploy an IPTV network in India.
Analysts say the factory is a demonstration of the willingness of ZTE to further carry out its strategies in neighbouring countries and regions.
The company announced early this year that it is to enhance its international performance.
Company figures show that ZTE fulfilled contracted overseas sales worth US$1.64 billion last year, growth of 169.5 per cent from previous year.
As a large developing country, India is gaining increasing attention thanks to its economic growth.
"I believe ZTE is taking advantage of the Indian market, which has abundant talent and preferential polices, to carry out its international expansion," said Zeng Jianqiu, a professor at Beijing University of Post and Telecommunications, yesterday in an interview with China Daily.
He said ZTE's market strategies are very much like those foreign companies used to adopt when approaching the Chinese market a decade ago.
He believes that the telecoms market in China is more developed than India's, and that leading domestic telecoms equipment makers could provide solutions for Indian telecoms operators.
"In fact, we should encourage more domestic firms to go to India to tap the booming demand in the huge market," he suggested.
However, Zeng warned that domestic enterprises should evaluate business risk beforehand.
"For example, there are many cultural differences between India and China," he said.
"Related laws and regulations should be carefully studied."
On the other hand, enhancing co-operation between local telecoms-related enterprises and foreign firms in India, while competing with them, should also be a top priority of domestic companies, according to Zeng.
ZTE is not alone in entering the Indian market.
Leading international telecoms operators and equipment manufacturers have also been drawn in.
Last week Huawei Technologies, a major rival in the domestic market, announced it is planning to invest more than US$100 million to set up a manufacturing and processing factory in India.
(China Daily April 5, 2005)
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