Current Situation Of China's Telecommunications Equipment Manufacturing Industry And Future Development, From Zte

Telecommunications industry grew very fast in last couple of decades in China. According to the industry report announced by Ministry of Information Industry (MII) on Jan. 31, 2008, revenue of all Chinese telecom operators reached 728.01 Billion RMB in 2007, with 10.9% increasing year on year. The CAPEX of all operators reached 227.99 Billion RMB. In 2007, in China mainland, fix network subscriber penetration rate reached 27.8%, and mobile network subscriber penetration rate was 41.6%. 210 million people got access internet, among them 163 million people access by broad band. With fast growth of telecom industry, Chinese telecom device industry developed very fast. ZTE and Huawei are outstanding Chinese companys in this market, growing with Chinese telecom industry. They become more and more important players in global telecom device industry, from followers to innovators.World telecommunications industry is experiencing since the Internet bubble burst in 2000, the largest strategic integration period of adjustment. With the development of the telecommunications industry the traditional boundary has been broken. Telecommunications, Internet, media network 'three networks' has become an inevitable trend. With new competitors emerging, operators, equipment manufacturers are faced integration, consolidation trend in order to meet the expectations of consumers - their use of all services, including cable, wireless, video and data come from one service provider who can provide not only easy to use, but also to have more concessions. China's telecommunications equipment manufacturing enterprises are in the context of access to this highly competitive communications equipment market.The main purpose of financial analysis is to evaluate the operating results of company in the past, to measure the company's financial situation, to predict the trend of development. Financial analysis include: the company's capital structure, solvency analysis, profitability analysis, the efficiency of utilization of assets, capital flow analysis, focused mainly on the company's financial position, results of operations and internal management of diagnostic analysis and summary. And the two similar enterprises through the comparative study of financial indicators and financial indicators of trend analysis can be found between the two businesses operating gap, as well as future trends. In this paper the development of China's telecommunications industry and development of the world's communications industry trends are introduced. According to ZTE's year 2003 to year 2007 financial statements data, by compared with ZTE and Ericsson, capital asset structure, solvency, operating capacity, profitability, return on investment, and other financial and operating performance indicators were analyzed. Based on analysis of ZTE financial statements data, the paper concluded some proposed solutions and corresponding recommendations. Before this paper was finalized, no Ericsson's 2007 financial statement data was available, so in the comparison on financial indicators did not include Ericsson 2007 data.Finally, China's telecommunications equipment manufacturing enterprises were analyzed by SWOT. As well based on further discussing on actual situation of ZTE, the vision and recommendations to ZTE for future development were proposed.