ZTE plans to manufacture full range of smartphones at its Manesar plant once its handset business assumes a certain scale in India, a senior company executive said, giving a shot in the arm to the country's plans of toning up its fledgling telecom manufacturing act.
The comments come at a time when the world's fifth-largest telecom gear maker is looking to develop 4G equipment, mobile devices and chipsets in the world's second largest mobile phone market after China.
"ZTE will start manufacturing handests in Manesar once there are appropriate volumes and a supply chain ecosystem comprising manufacturers of semi-conductor products like multi-layer printed circuit boards, high-level integrated circuit boards and many more silicon components that go into a mobile phone," Zhang Renjun, senior vice-president of ZTE, told ET on the sidelines of a recent media event in Hong Kong.
Shenzhen-based ZTE, at present, offers advanced repair services of telecom products deployed in India at its Manesar plant, about an hour's drive from Delhi. The factory, however, is equipped with manufacturing and testing facilities. Currently, the company brings in all its handsets from China.
Zhang, who oversees ZTE's India operations, declined to reveal project specifics, but Yuan Kang, who heads ZTE's terminals business in India said that to "start handset production in Manesar, the manufacturing unit would need to produce at least 5,000 units per shift for one assembly line", or about 4 million handsets a year. The terminals business includes mobile devices and data cards.
ZTE plans to sell roughly 4.2 million phones in India in2014, which is 7% of the 60 millions it plans to ship globally.
The company is currently way down in the pecking order of handset makers in India's fast growing but increasingly crowded smartphone market, led by Korea's Samsung, and followed by home-grown Micromax and Karbonn. Other major players in the fray include global biggies such as Apple, Sony, Nokia, HTC, LG and Lenovo.
A possible ZTE investment in a handset factory will, however, be music to the government's ears, especially since the communications ministry has been under pressure to boost local manufacturing in the backdrop of India's economic growth slowing to its lowest pace in a decade coupled with the country's high current account deficit.
ZTE's manufacturing plans comes at a time when it expects roughly 30% of its over-$800-million (. 5,000 crore) India revenues to stem from the devices business in 2014-15.
The company's leadership declined to reveal whether its popular 'Blade' mobiles or its premium smartphones like the 'Nubia' or 'Grand S' series would be manufactured in Manesar. However, the latter two models would be brought to India later this year.
