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3G boom pushes ZTE ahead

ZTE Corp, the world's sixth biggest handset vendor by sales, expects it will become one of the top three phone vendors by 2013, thanks to booming 3G phone sales domestically and overseas, the Shenzhen-based firm said today in Beijing.

Meanwhile, it expects wireless equipment revenue will grow 30 percent year-on-year in 2009 despite the global financial crisis, as there is still strong demand in emerging markets.

In 2008, ZTE sold 45 million handsets compared with 31 million units the previous year. By 2008, ZTE had sold 100 million handsets since its inception in 1985.

This year ZTE will launch more phone models with GPS (global positioning system), mobile TV and video download functions.

"We have developed a unique way to explore the mobile phone market and it has proved effective," said Xiong Hui, ZTE's mobile phone unit head.

As distinct from leading vendors like Nokia and Motorola, ZTE's sales greatly depend on group purchase carriers, China Unicom and Vodafone Hutchison Whampoa 3G.

"The handset firms with strong telecommunications backgrounds, like Huawei Technologies and ZTE, will have big opportunities as their products are regarded as better supporting the network," said Sandy Shen, an analyst at Gartner Inc.

As well as the mobile phone, ZTE will launch nine new products targeting consumers, including data cards, video monitors and netbooks with built-in 3G chipsets.

Shenzhen-listed ZTE jumped 3.17 percent to 35.42 yuan (US$5.28) compared to the 3.48 percent growth of the Shenzhen stock market today.

In 2008, ZTE's revenue was 44.3 billion yuan, a 27.3 percent growth year-on-year. Of this, over 60 percent of the revenue was from overseas markets, including Europe, North America and Africa.

Income from ZTE's wireless equipment reached 28.9 billion yuan in 2008 and it's expected to grow 30 percent this year, according to Jack Wu, ZTE's wireless market director.

"In a tough environment, people can give up luxury clothes or food but they can't do without phones. In emerging markets, the government also encourages investment in infrastructure, including telecommunications network construction," Wu said.

China is spending 4 trillion yuan as a stimulus package against the crisis. In the IT and electronics sector, the government will encourage the development of 3G, flat display panel and integrated circuits.

In January, China issued 3G licenses to China Mobile, China Unicom and China Telecom. The 3G services allow handset users to enjoy high-speed services like film downloads and video conferencing.


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