ZTE entered the Indian market in 1999 and since then has played a significant role in ushering leading technology at competitive prices. In an interaction with TelecomTiger Wang Yang, Director Enterprises ZTE India speaks about the Chinese telco major’s plans for enterprise business in India, clears apprehensions about dealing with a Chinese company and elaborates on company’s huge success in India and elsewhere. Excerpts:
Q. In India, the average revenue per user (ARPU) in telecom sector is falling drastically. For new service providers, it is as low as Rs 45 per month. Do you think it will be a good strategy for them to focus on Enterprise business?
A: India is the third largest telecommunications network in the world with its subscriber base growing steadily and has emerged as one of the fastest growing markets. The Indian telecom sector in the last decade has seen major evolution due to regulatory changes making telecom one of the major spur in India’s growth story. On an average it adds more than 17 million subscribers every month. Telecom industry contributes 2% to India’s GDP and is bound to increase owing to huge urban potential and untapped rural market.
The intense competition in the Indian telecom industry has resulted in declining tariffs and therefore ARPUs. With still furiously growing number of new entrants in this sector and the telecom companies focusing on rural areas for increasing subscriber base, they might not witness a significant increment in revenues.
On the other hand, the Indian ICT led enterprise market is projected to become INR 38,400 crores by 2014.
The enterprise sector comprises of a wide variety of businesses, some as small as an individual person working from home to larger enterprises or government offices with more than 300 employees. Globally, telecom operators increasingly depend on the enterprise sectors for new opportunities of growth, especially the markets which are nearing their saturation point.
To increase productivity, enterprises are gradually seeking integration of communication application within various fixed and mobile devices. Hence, the operators are offering bundled services that can assist in messaging, voice, video and data services. For example India’s urban population is expected to reach 500 million (45% of eth current population size) throwing up immense problems in housing, transportation, municipal services, health care and education among others. This offers telecom companies a huge growth opportunity to work towards building smart cities and enterprises.
Q. Even though ZTE is present in India for about one and a half decade, it is not considered as a strong brand in India. Why is it so?
A. ZTE entered the Indian market in 1999 and since then, has played a significant role in ushering leading technology at competitive prices. The organization has also helped increase the telecommunication penetration by making telecom services affordable to the ordinary Indian citizen. ZTE offers end-to-end solutions to the entire eco system and to its enterprise customers, including telepresence, data centre, smart grid and intelligent transport solutions. It also provides integrated IT solutions, builds infrastructures to link data communication networks of individual authorities, and supply appropriate application systems related to office automation, industrial and government businesses.
ZTE is a leader in providing integrated communication solutions. It has the industry’s most complete product to deliver end-to-end solutions, virtually covering very telecommunication sector, including wireless, access & bearer, AS, terminals and professional services. The company’s expertise in these areas allows it to satisfy the demands of global customers which spans over more than 140 countries and regions and assist them in their quest for innovation. The company is strong in the smart terminal arena and has become the world’s fourth-largest handset maker. ZTE has established 15 state-of-the-art R&D centers in the US, China, France, and India. ZTE ranked No.1 among global companies in terms of PCT patent filings in 2011 with 2,826 total applications.
Q. What are your plans in Enterprise segment in India? What are your target sectors?
A. The enterprise segment now being one of the four strategic markets for ZTE, the company has set up special government-enterprise network marketing and service centers in more than 100 countries and regions, including America, India, Brazil, Japan, Russia, Britain, and France.
The India enterprise solutions market is estimated to be worth $3 billion and is anticipated to grow to $8 billion by 2014. To address this enormous potential in the Indian market ZTE has formed an enterprise solutions team to work with key clients in the government and private sector.
Globally ZTE has achieved great success in segments like government, road transport, metro communication, electric power, petroleum and petrochemical, education and scientific research, medical and health, finance and taxation and hence will focus in similar sectors. Its first foray in the Indian enterprise solutions market is the winning of a major enterprise solution contract in the non-telecom sector. The order was made by Power Grid Corporation of India to provide fixed-network transmission services across the country.
Q. Indian companies sometimes have apprehensions about dealing with a Chinese company. For example, in the past Intelligence agencies have said that the Chinese companies may pose threat to national security. What do you have to say on this?
A. ZTE operates in over 140 countries and regions around the world. The Company always respects and complies with international and local laws wherever it operates.
ZTE was the first telecom company to acquire the '''ISO 15408 CC Certificate'' for its equipment. ISO 15408 CC Certificate is the highest level of security certification and meets eligibility criteria announced by Indian government on security concerns.
The CC certification includes the evaluation of technologies such as security performance, loophole analysis, encryption technology and product manual. It also includes systematic evaluations of the entire process from research and development procedure and configuration management to production and shipping.
ZTE also follows strict internal auditing and compliance policies. The company has a dedicated import and export control committee chaired by senior executives. It also provides internal and external import and export compliance training to its employees.
Q. What percentage of your total Enterprise business comes from China?