ZTE USA says has not held Motorola talks
ZTE USA has not held talks with Motorola
ZTE USA seeks internal growth rather than acquisitions
ZTE USA aims for more than $100 million ‘08 phone orders
The head of ZTE Corp’s U.S. business said on Wednesday he has not held any talks about an acquisition or partnership with Motorola Inc, quashing speculation the Chinese telecommunications equipment maker would buy Motorola’s handset business.
George Sun, chief executive of ZTE USA, which sells network equipment as well as handsets, also said he does not see any immediate need for acquisitions.
“We are open to talk, but so far I don’t feel any urgent requirement” for any deals, Sun told Reuters in an interview.
In February, a ZTE Corp executive told Reuters that the company was looking for “wider cooperation” with Motorola, which has said it is exploring strategic options such as a potential separation of its struggling handset business.
Sun declined to comment on the February interview except to say it was likely related to another part of the business.
ZTE, China’s second biggest telecom equipment maker behind Huawei Technologies Co Ltd, has said that the U.S. market is key to its global expansion plans.
But so far the company, which brought Sun to the United States in 2005 and starting ramping up its sales operation here in 2006, has made few inroads.
It sells one handset model to regional service MetroPCS Communications Inc and has agreed to sell wireless data cards to No. 3 U.S. service Sprint Nextel for a new high-speed network it is building based on WiMax.
Some analysts have said that ZTE could look at a purchase of Motorola, the leader of the U.S. handset market, as a way to quickly expand its business here.
However, Sun said that ZTE USA was aiming for internal growth rather than acquisitions here, adhering to its parent company’s tradition of building on its own brand products.
Sun said he was targeting in excess of $100 million in purchase orders for handsets in the United States in 2008. This compares to about $10 million in orders in 2006. He said that 2007 orders were higher than 2006, but he would not give specifics as ZTE has yet to report 2007 financials.
ZTE USA plans to focus on smaller operators like MetroPCS this year but aims to have made inroads with some of the five large national providers by next year, Sun said.
“By 2009 I want to a get a serious engagement with tier one carriers,” he said, noting that the large U.S. mobile providers keep tight control of the phones used on their networks compared with operators in other parts of the world.
AT&T Inc is the biggest U.S. mobile service, followed by Verizon Wireless, a venture of Verizon Communications and Vodafone Group Plc.
Sun said that a promise by Verizon Wireless to open its service to any device that works on its network could be an opportunity for a newcomer like ZTE, but he said that it was not yet clear if that project would bring sales for ZTE.
He said he expects faster growth from ZTE’s handset business than its network infrastructure business in the United States this year.
But Sun said a U.S. government auction for wireless airwaves could potentially help new entrants such as ZTE win network equipment business in the United States.
ZTE plans to announce at least one new phone for the U.S. market at CTIA, the country’s annual wireless showcase, in early April. Around the same time it hopes to announce a new customer that “might not necessarily be a handset customer,” Kathryn Gonia, ZTE USA’s communications director said.
Sun said the U.S. market for handsets was more difficult to crack than in the rest of the world where ZTE can sell directly to consumers. In the United States, ZTE needs to reach an agreement with operators about what consumers want.
“This is really hard work,” he said. “The market here really is a challenge.”
Tags: Motorola, ZTE
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