ZTE Expects Solid Growth For Its Enterprise Business

BEIJING—Chinese telecommunications-equipment maker ZTE Corp. is pushing to increase quickly its enterprise business as it seeks to expand its hold on the burgeoning network-equipment and -service market for governments and businesses.ZTE primarily makes smartphones and infrastructure equipment for telecom service providers, but the company said it expects to see strong growth in its less developed sector that makes communication equipment and provides services for governments, large businesses and other heavy infrastructure projects.ZTE Vice President Xu Ming said Tuesday that the company expected revenue for its enterprise business to grow to between $6 billion and $7 billion by the end of 2015 from 8.8 billion yuan, or about $1.4 billion, in 2011. Mr. Xu said he expected 2012 enterprise revenue to grow 70% from the 2011 level.Across the enterprise industry, companies are seeing surging growth as communications equipment and services become more critical for governments and businesses across the world. Mr. Xu said one way for ZTE to compete would be to focus on the industries it specializes in, pointing out that ZTE held more than 50% market share for railroad signaling and communications in China, and was growing its presence in the industry to Russia and Central Asia."For total information and communication technologies revenue IBM is the leader," but in different industries, for example in the railway business, IBM isn't a major player, he said.He also said ZTE was striving to grow its sales channels abroad. Although it has 1,000 channel partners in China, he said it currently has far less in 15 key markets the company has identified for growth. As a result, the company is aiming to sign around 50 partners in those markets this year, and more than 100 in each by the end of 2013, he said. Mr. Xu also said the company currently has 25% of its 27,000 research and development engineers working on its enterprise offerings, and said he hopes to expand that number to 30% by the end of 2015.Last week, ZTE defended itself in a congressional hearing due to continuing concerns from the U.S. government that equipment made by ZTE could be used by China's government to track emails or disrupt U.S. communications systems. Mr. Xu said the concerns were aimed at the wing of ZTE that built telecom infrastructure equipment, and that any negative press associated with the U.S. accusations haven't had a negative impact on the company's enterprise business.