ZTE sets its sights on Asean to boost growth
By Edwin Yapp July 25, 2017
- Aims to showcase pre-5G technology to grow in Asean, amid challenges
- Adding both management and technical resources in a bid to grow
FOR many years now, China-based telecommunications gear providers have been hitting the headlines for their aggressiveness in winning contracts all over the world, including in Malaysia.
In the early days, the Nordic countries had the lion’s share of these contracts but in the past decade or so, Shenzhen-based ZTE Corp started becoming a formidable force insofar as supplying mobile networking gear to a large number of mobile operators around the world.
Founded in 1985 primarily as a semiconductor company, ZTE today has diversified into a telecommunications gear powerhouse, now listed both on the Shenzhen and Hong Kong Stock Exchange. In recent years, it has won a number of significant contracts in the Asia Pacific and Southeast Asia (SEA).
It counts amongst its customers in Asia: Japan’s Softbank; China Mobile, China Unicom and China Telecom; Telekomsel in Indonesia, Digi.com Bhd, part of the Telenor Group, and U Mobile Sdn Bhd, both of which are based in Malaysia.
According to ZTE vice president James Zhang (pic, right), the company is poised to grow further in the SEA region as it is an important part of ZTE’s business plans going forward.
Speaking to Digital News Asia on the sidelines of the recently concluded Mobile World Congress Asia in Shanghai, China, Zhang said the population growth in the SEA region has increased by some 40 million.
“There is an increase in GDP (gross domestic product) across the region and consumer demand for mobility is driving growth,” he told DNA in an interview. “And we believe that telecommunications infrastructure is playing a big part in the growth.”
Asked which specific countries ZTE means when he spoke about the SEA region, Zhang said ZTE is active in Indonesia, Singapore, Malaysia, Vietnam, Philippines and Thailand.
For Malaysia, Zhang said it has always been an important market for ZTE since it broke into the market with operators such as Digi, U Mobile and even before these two, Packet 1 Networks (P1) Sdn Bhd.
In 2014, Telekom Malaysia Bhd (TM) took a 55.3% stake in Packet 1 for RM350 million (US$81.5 million) and raised its stakeholding from 55.3% to 72.9% in 2016. P1 is now a full-fledged subsidiary of the telco giant and has been renamed webe. Besides these, Zhang said ZTE also supplies fixed-line equipment to TM.
“Currently, we are an almost exclusive vendor of Digi and we supply about 70% of equipment to U Mobile,” Zhang said. He did not mention how much of the share of equipment ZTE supplies to webe.
But according to industry sources, the ZTE has about 25% to 30% of the share of hardware equipment supplied to webe – where it is used in the east coast and East Malaysia – while the rest is supplied by its crosstown competitor, Huawei Technologies Co Ltd.
Quizzed as to whether it will try to engage the other two big operators, namely Maxis Bhd and Celcom Axiata Bhd, Zhang said that “it is doing so.”
“We are trying to engage with Maxis and not just to swap out other vendors from the network but to upgrade the network to new technology [such as pre-5G and 5G eventually], and we believe we are a strong potential candidate [in this area],” he claimed.
DNA had earlier reported that ZTE believes it has what it takes to catch up to larger telecommunications vendors over the next four years, thanks to its pre-5G and upcoming 5G technology. In Malaysia, it believes it can play a role in a few areas, including the country's smart city initiatives.
We have a suite of solutions for that," its SEA managing director Jeff Zhou had told DNA. “From the government side, I hope the Malaysian government can think of how to give the public better service and to make a traditionally long process shorter,” Zhou added.
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