Magazine

Good Telecom Calls In China


In most parts of China, Yin Yimin would be the toast of his town. In January, 2004, Yin became president of ZTE Corp., a leading provider of wireless equipment and cellular phones. He enjoyed a pretty spectacular first year: ZTE reported record profits of $153.6 million, saw sales jump 55%, to $2.56 billion, and in December raised $400 million by listing on the Hong Kong stock exchange. ZTE is well positioned to take advantage of growth in China, the world's biggest cellular market, and has plans to expand everywhere from India to Brazil.

Pity for Yin that ZTE is based in Shenzhen. That city is also home to Huawei Technologies Co., a bigger, better-known maker of telecom gear that has won plenty of attention as it expands overseas. Although Yin doesn't worry much about the rivalry and says that for inspiration he looks to Dell (DELL) and Microsoft (MSFT) more than Huawei, he concedes there is a real sense of competition between ZTE and its crosstown rival. "It makes us both work much harder because we are so close to one another," says the 40-year-old Yin.

Despite ZTE's listing last year, the Chinese government still owns a big chunk of its shares. But Yin, who earned a master's degree from the Nanjing University of Posts & Telecommunications in 1988, is one of a new breed of bosses at China's state-owned enterprises. He is keenly aware of how competitive the industry is, doesn't take state support for granted, and thinks about business as a constant battle. "The pressure is great," says Yin. "Truthfully, every day what I think about isn't development -- it's survival."

Yin's survival instinct is helping push ZTE in new directions. He took over the president's job from founder Hou Weigui, who remains chairman of the company. The company is expanding in the developing world, with ZTE selling wireless equipment to operators in Egypt, Mongolia, and Russia and planning a mobile-phone factory in Nigeria. ZTE is still pushing hard in its home market, too. On June 7 the company announced it had joined forces with China Telecom, one of two state-owned fixed-line operators, to build next-generation networks in Beijing, Shanghai, Guangzhou, and elsewhere.

Yin is also looking to wealthier countries. In February, ZTE announced a partnership with Alcatel to provide equipment to the French company. And on June 3, ZTE opened a U.S. headquarters in Dallas. Yin realizes success won't happen overnight in the West, but, he says, ZTE is willing to take the long view. When it comes to would-be customers in developed countries, "we continually discuss what their future needs are. Not for today, but for tomorrow or the day after." With that kind of determination, Yin is likely to win more recognition on the world stage -- as well as back home in Shenzhen.

By Bruce Einhorn


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