ZTE Asia revenue hit by India import ban, but global profit up

Chinese telecom equipment-maker ZTE today said its revenue from Asia took a hit due to the ban imposed by the Indian government on the import of telecom gear from foreign vendors earlier this year over security concerns.

"...Revenue from Asia declined due to an incident relating to the safety inspection of communications equipment in India," ZTE said in a statement.

However, notwithstanding the decline in revenues from Asia, ZTE's international revenue rose 19.58 per cent year-on -year to $2.246 billion.

The second quarter net profit of ZTE grew by 12.02 per cent to $129.143 million in the six months ended June 30, 2010.

Besides, with the telecom equipment security issue in India almost settled, ZTE is aggressively looking at reversing the negative growth trend seen in the last six months.

"The company is in talks with various Indian telecom operators to provide telecom equipment and is looking at areas like WiMax and 3G to contribute to the company's growth in India," it added.

Due to security concerns, the Department of Telecom had asked all operators to get security clearance from the government before importing equipment, especially from China.

As a result, no orders were placed in last six months.

However, later, the government issued guidelines allowing telcos to import equipment from foreign vendors after meeting certain criteria with regard to national security.

ZTE and its Chinese rival, Huawei, were the worst-hit by the prohibition imposed by the Indian government.

ZTE and Huawei compete with global peers like Ericsson and Alcatel Lucent in India.

The revenue contribution from European and US markets amounted to 18 per cent of ZTE's total revenue for the first time, it said.

The year-on-year revenue contribution from these two markets increased by 45 per cent, ZTE said.