Millennium Post

Rs plunges by 23p to near 5-month low of 55.11 per $

Rs plunges by 23p to near 5-month low of  55.11 per  $
China's second largest telecom gear maker, ZTE, is looking at the Indian market for growth this year as it looks to recover last year's $400-million losses.

In 2012, ZTE India posted a small rate of growth, realising revenues of $700 million, around half the $1.5 billion it received in 2009, a write up in the state run China Daily titled 'ZTE banks Indian telecom market' said.

ZTE suffered a loss of $400 last year and showed signs of recovery this year with 35.9 percent increase in net profits in the first quarter of this year boosted by gains from selling assets late last year.

Top executives of the both Huawei, Chinas number one Telecom major along with ZTE were reportedly accompanying Chinese Premier, Li Keqiang, on his current tour of India, as part of his big business delegation.

Xu Dejun, CEO of the Indian arm of the ZTE, said he is re-evaluating India's telecom market and has decided to shift focus from telecom equipment to smartphones, which now account for around 10 percent of ZTE's sales in India. Xu wants to raise that to 30 percent within a few years.

In three years, he added, ZTE hoped to be among the top three smartphone makers in India. To achieve the goal, ZTE unveiled five new smartphone models last week and announced a
partnership with local company Calyx Telecommunications to distribute smartphones in India.

The move came after Huawei Technologies Co Ltd, which made $2 billion profit internationally, launched two new smartphone models in India last month.

ZTE and Huawei accounted for around 30 percent of India's smartphone market in the first quarter of 2013, up from 13.2 percent a year ago, the China Daily write up said.

Another way for ZTE to revitalise growth is to further localise, Xu said. 'We want ZTE India to be an Indian company, not the Indian branch of a Chinese company,' Xu said. Xu was promoted in February to oversee ZTE's entire business in India after working for more than nine years in the country.

Regulatory uncertainties combined with 'scandals', including one over the allocation of telecom bandwidth, has dampened growth in India, it said.

In July 2012, for example, India lost 20.5 million mobile phone users, the first time India experienced a decline in mobile phone users. ZTE, has 23 offices throughout India and 85 percent of its 1,500 staff are hired locally and a third of the management positions are filled by Indians.
The Indian rupee on Monday fell to its nearly five-month low level of 55.11 by losing 23 paise on sustained dollar demand from oil importers and concerns over possible rating downgrade by S&P.

Forex dealers said weakness in local equities and a firm dollar overseas against other currencies also weighed on the rupee.

The local unit commenced the day lower at 55.06 against the dollar from its Friday's close of 54.88 at the Interbank Foreign Exchange (Forex), market.

However, it later recovered to a high of 54.80 on dollar selling by exporters and initial firmness in domestic equities but again fell to a low of 55.20, before settling at 55.11, a fall of 23 paise, or 0.41 per cent. It is rupee's lowest level since 7 January this year, when it had closed at 55.23.

'The fall in rupee was expected after S&P's warning to downgrade the Indian economy to junk status on Friday. Also a bearish stock market and weakening in euro and Japanese yen against the dollar also dampened the rupee sentiment,' said N S Venkatesh, Head (Treasury) at IDBI Bank.

He added that rupee will move in a range of 54.80-55.20 this week.

On Friday, global agency Standard & Poor's threatened to downgrade India's rating to 'junk' status if it fails to pursue reforms.

The dollar index was down by 0.25 per cent against a basket of six major global currencies.

Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said: 'The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, traded weak today as the euro lost against the dollar which hit the rupee.'
PTI

PTI

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