Dusseldorf, the capital of Westphalia, is not known for its countrymen.

Because ZTE (00763. HK) listed in Hong Kong, ZTE has a whopping 20% per cent of its equity capital, and 50,000 of its staff, 10,000 of whom are resident overseas, accounts for less than half of its income, and with Huawei, Ericsson and Cisco as the world's largest provider of four telecoms equipment-while many Chinese companies are keen to go to sea ZTE has stepped up its international footsteps earlier.

Although ZTE entered Germany in 2005, it was only after a rather deliberate resolution that it wholly acquired all of Alcatel-Lucent's local company and made additional investments to provide telecoms services to epuls+, a major German telecoms provider, with 70 million euros before and after ZTE. The company has now become ZTE's German services company (hereinafter referred to as "ZTE Germany"), which is not only part of ZTE's European strategy, but also an important distribution of ZTE's efforts to increase the structure of its revenues.

As of the time of press, ZTE Germany is functioning normally, has been approved by the European Union and the Chinese government, is waiting for the German government to approve the acquisition. Its current staff is 15 Chinese (all management) and 900 Germans, so ZTE's acquisition does not affect the employment of local employees, which is also the main reason why ZTE Germany is regarded by the German Federal Foreign Trade and Investment Agency (Germany Mini-advertisements & Invest) as an excellent representative of Chinese enterprises.

21st Century Economic report reporter interviewed ZTE European region President Tri Jia, ZTE German service company CEO Xu Ziyang, detailed the acquisition of the ins and outs. ZTE's attempt could be a reference to a Chinese company currently aspiring to open its territory abroad.

Prior to acquisition: equipment to open the way to take large orders

Acquisition: cannot just acquire a "shell"

ZTE does not fight unprepared. For this acquisition, it hired a specialized firm, consulting firm, HR (Human resources company), finance company. In choosing these professional institutions, ZTE's focus is on examining their local expertise and understanding of the industry, which they need to assist in conducting due diligence on the underlying companies and ensuring that ZTE adheres strictly to local laws from the time of acquisition to acquisition. And ZTE specializes in recruiting HR companies, but also because Germany's trade unions strong, the protection of labor is extremely strict.

German Federal foreign Trade and Investment agency a person said once a Chinese company bought a local German company, it was hoped that employees would have to work two hours a week to give their employees an ideological job, ask them if they wanted to work more easily, or want their jobs to be more competitive, and then talk to the unions again and again. The Chinese company's request was eventually approved and considered a success story.

ZTE and Alcatel-Lucent completed the Acquisition Framework agreement (term sheet) in August 2013 and agreed to the January 8, 2014 handover network. During the negotiations, the core discussion points focused on how to smooth the handover of the network without affecting the Eplus network has the quality of service, the most controversial is the intangible assets, such as the service capacity of how to convert the potential intellectual property rights to deal with, and so on.

What impresses Xu Ziyang most is how to ensure the smooth transition of Eplus customer network on the day of delivery service? This is a challenging task: according to the agreement between the two sides, the operation of the handover time to determine the morning 2 o'clock-6 points, this period to complete the IT Infrastructure network switching, work single system, ERP system, monitoring server, security server, such as the smooth switching of key servers, very difficult.

Signed a framework agreement to the final contract four months of adjustment and negotiations, the two sides after several rounds of hard negotiations to finally reach an agreement, part of the property rights of the lack of access to the ability and software, in ZTE Soft software company's strong assistance to complete the next online commercial (Zsmart operation Services Solutions), Strong assurance of the smooth operation of the customer network, fully demonstrated the Chinese software company's extremely high reaction speed and efficient development strength, and in another Chinese software manufacturers to quickly build their own ERP system.

January 8, 2014, ZTE Germany successfully completed the handover during the time window period of the strict definition of the agreement. After the handover of the day, some of the employees belonging to the epuls+ operator feel no mutation, have asked eplus+ service Director "You confirm network operation has handover?" ”

In Xu Ziyang's view, any telecoms operator there are four most important departments: Market sector-focus on consumers and enterprise users, positioning and segmentation of customer base, looking for the most appropriate niche market positioning and demand; Planning Department-translating customer requirements into technical requirements, choosing the most advantageous strategic partners, Building a competitive network of basic services; Construction Department-efficiently complete the construction and deployment of the infrastructure network in the national or key areas in the designated time window, maintenance Department-Monitor and maintain the communication network, ensure the normal operation and KPI of the telecommunication network, and the customer experience, must be quickly repaired and replaced if the equipment fails. Among them, the core competence of the operators should focus on the consumers ' fine mining and technical planning competitiveness, and the efficient network construction and efficient operation should be transferred to the professional third party strategic partner company Outsourcing Management, which makes the operator more thin, focused and flexible.

ZTE and Huawei are already working more with the construction sector to provide them with telecommunications equipment. In recent years, many telecom operators will maintain the department's work more or less outsourcing, because the telecommunications equipment provider familiar with equipment, to undertake maintenance work has a natural advantage, so the telecommunications equipment provider to accept the telecom operator outsourcing contract, also became logical.

Tri Jia points out that Ericsson now earns more than 1/3 of its revenue from services in this area. ZTE is also trying to increase its share of revenue from services.

ZTE and epuls+ cooperation, also from the provision of equipment deployment. From 2009 onwards, ZTE became the main equipment provider of epuls+. The two sides deepen understanding in the cooperation, in 2013, ZTE got Epuls+ 's big contract: provides the network safe operation service for the epuls+.

Tri Jia points out that epuls+ is Germany's third-largest operator, with more than 25% of Germany's market, and epuls+ is the most thorough outsourcing network maintenance company, so this is a big contract. With the fierce competition in the communication market, epuls+ hopes to continuously improve and improve the quality and management level of communication maintenance services to better provide consumers with satisfactory communication experience, and the original service partner contract expires, Eplus+ finally choose ZTE, Hope to cooperate well ZTE brings better maintenance of network quality and customer experience.

After getting the contract, ZTE was weighing the pros and cons, and decided to acquire Alcatel-Lucent's previously established project company for the contract, ensuring a normal continuation of the quality of eplus+ basic communications services and a good start for subsequent changes.

Tri Jia told reporters that the acquisition of this company, ZTE most valued the experience of its employees, more than half of the company's more than 700 employees, more than 15 years-20 in Germany, such as high-end market professional services capabilities; The biggest concern is whether the acquisition process is smooth, after the acquisition can be good, after all, such a large acquisition before there is no precedent, Germany is one of the countries with the strictest labour protections.

After acquisition: 15 Chinese + 900 Germans

Alcatel-Lucent left, along with more than 20 executives. ZTE, the key posts, is ready to find the right alternative in Germany. Xu Ziyang joked that when he interviewed other people, the candidates were also "interviewing" him and ZTE, who had not been so knowledgeable about ZTE before.

Among them, ZTE hired a local professional high-end HR personnel, the most important responsibility is to deal with the German trade union organizations.

The day-to-day operations of the localization company depend primarily on the German local team, ZTE German service company 15 Chinese people, in addition to the CEO and CFO, the other Chinese more in the functional departments as deputy, through the optimized management process and system not only to ensure the smooth operation of Germany's local business, but also to ensure that the Chinese side of the direction of the grasp, And the right to participate and decide on major events and decisions. Tri Jia told the 21st century economic reporter, ZTE took over, the continuation of the eplus with the consistent good cooperation, from the KPI indicators to see ZTE's performance is very good, epuls+ quite satisfied. Tri Jia that it appears ZTE is using its former employees, but because most of epuls+ 's equipment is provided by ZTE, ZTE's technicians are more familiar with the equipment and better able to maintain it faster.

Tri Jia believes that ZTE Germany is currently learning "Made in Germany" (made in Germany), the German standard in industry can be said to be the highest standard. ZTE's ability to provide services to the German market will try to extend that capability to other parts of the globe. In addition, she observes, the Chinese staff's advantage is to have the problem, will solve quickly, the German staff is not so "hands", but they can more time find more accurate direction again. She hopes that the future ZTE staff will be able to combine these two major advantages.

With the good development of business in Germany, ZTE will move to Germany at its headquarters in Europe. First of all, Germany has ZTE's biggest contract, and there are more employees here. Second, in manufacturing and services, Germany has a global edge that can help Chinese manufacturers catch up faster and deeper. And Germany is a European transportation hub, where it is more convenient to go. Tri Jia notes that German employees are highly operational and want to build a knowledge platform that they can start sharing in Europe and ultimately share globally.

After taking over, ZTE made additional investments to the company, investing around € 70 million. At work level, ZTE follows the practice of the original staff to ensure employment stability. This is the German Federal Foreign Trade and Investment agency in the business of the most concern, so in their view, ZTE Germany is a good representative of Chinese enterprises.

ZTE's German service company is running smoothly. By the time of press, the acquisition had been approved by the European Union and the Chinese government and would soon be approved by Germany.