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ZTE wants Middle East to provide 30% of revenue

Chinese vendor to tap into MEA region’s 3G and broadband projects

ZTE wants Middle East to provide 30% of revenue
3G infrastructure projects will drive spending in the Middle East and Africa.

ZTE wants the Middle East and Africa to play a bigger role in the firm’s fortunes, as the Chinese vendor looks to capitalise on the region’s 3G network and broadband infrastructure projects.

Zhang Renjun, ZTE’s senior vice president for the Middle East and Africa (MEA) region told CommsMEA that over the past six months, the Middle East and Africa was responsible for 20% of ZTE’s total revenue. “We expect this to increase to 30% over the next year,” he said.

“The telecoms industry in the Middle East and Africa market is developing at pace, thanks to the investment and innovation of its governments and the industry as a whole.”

Although investment in the telecom sector in some of the key markets of the Middle East is set to decline slightly, according to a recent report from research firm Frost and Sullivan, Renjun said he was confident that there are enough projects in the region for ZTE to reach its target.

Principal analyst Matt Walker of telecom consultancy firm Ovum said Chinese vendors’ ties with banks will be important to their success in winning projects in a tougher economic climate.

He said: “Chinese vendors ZTE and Huawei both have billions of dollars in either explicit or implicit credit lines with various Chinese banks: the China Development Bank, the Export-Import Bank, and the Bank of China. This subsidised financing helps these Chinese vendors' carrier customers expand more easily and quickly, which also facilitates deal activity.”

ZTE recorded revenue of US$4.06 billion during the first half of this year, which represented an increase of 40% against the same period of 2008. Net profit stood at $110 million, year-on-year growth of just over 40%.

During the first half of the year, ZTE secured a contract to deliver the largest WiMAX network deployed to date in the Kingdom of Saudi Arabia, and Renjun said that ZTE was recruiting locally as part of its strategy to boost its share of the MEA market.

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