ZTE net up 12% on US, EU sales

Dylan Bushell-Embling
20 Aug 2010

ZTE's profit grew 12% in the first half, despite declining revenue in Asia due to India's restrictions on foreign telecom gear.

The state-owned vendor reported net income of $129.1 million on the back of 10.9% revenue growth, almost all due to higher demand in Europe and the US, in particular for its handsets.

Sales in Asia excluding China fell 19% to $770 million, due to India's informal ban on Chinese telecom equipment, which was only lifted in June.

Domestic revenue grew just 3.5% to 15.5 billion yuan ($2.28b) as 3G network spending by the country's major operators slowed.

But revenue from ZTE's European and US markets grew by 45% year-on-year, with the sectors contributing 18% of overall intake for the first time.

Sales to carriers – ZTE’s biggest product line – increased by just 1.1% during the half compared to a 39.7% increase in handsets and modems and 18% growth in software and services.

The terminal business accounted for 25% of total sales, up from 20% a year ago.

ZTE has been pushing hard to make inroads into the US market, and recently scored a milestone victory. US carrier Verizon Wireless yesterday launched ZTE's Salute phone, marking the first time the vendor's handsets have been available through any of the major US carriers.

Strong sales of 3G handsets in China led the growth in terminal product revenue, ZTE said.

The company added it expected to benefit in the second half from continued carrier investment in high-end technologies such as 4G equipment and cloud computing.


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