Alca-Lu and NSN mergers are fruitless, believes ZTE exec

Having recently announced that it has overtaken Alcatel-Lucent to become the 4th largest infrastructure vendor with a 12.6 per cent share of the market, ZTE claims that the recent mergers between established industry players have not proven to be successful.

Highlighting the partnerships that created Alcatel-Lucent and Nokia Siemens Networks, Wei Zaisheng, executive VP and CFO at ZTE, said that there were few example where this had proven to work well.

"That is why we are very cautious on this kind of strategy," Wei said. However, "it is a possibility for ZTE," he admitted, albeit an unlikely one. [Consolidation] is not the only way."

Rather than pursue this route, Wei maintained that ZTE was focused on organic growth to boost its position both at home and, critically, in markets outside of China.

"There are so many opportunities [outside China] for ZTE to find," Wei said, explaining "Our general strategy is to hire more local people." ZTE needed to catch up with engineering capabilities in Europe, he said, which would mean employing more engineers in European markets.

While the company indicated that it planned to invest in Europe to create better products with a lower price and with more technical advantages, Wei was keen to stress that ZTE did not want to be seen as a disruptive force in Europe.

Following the announcement of the company's Q1 results, ZTE's chairman, Hou Weigui, hoped that exports would grow faster than last year after admitting that international sales rose by a more modest 11.3 per cent to 29.9 billion yuan, accounting for just under half of its total revenue. He predicted that faster growth in exports would push foreign sales back above half of ZTE's total this year.

For more on this story:
Total Telecom

Related stories:
No merger on horizon, claims Alcatel-Lucent CEO
Alcatel-Lucent posts a profit, but cuts 2010 outlook
Telefonica Spain selects ZTE for giant WiMAX deployment
NSN scrambles profit in Q4; ZTE expects 50% rise in profits