SHANGHAI - China's No 2 telecommunications equipment maker ZTE Corp expects group revenue to grow by about 30 percent over the next few years, fueled by the rapid rise of its cell phone unit, a senior executive said.

ZTE also expects mobile phone revenue to grow 35 percent this year and form half of the group's total revenue in 5 years, He Shiyou, ZTE's head of mobile terminals, said at the Reuters Technology Summit in Shanghai on Monday.

"From the group's perspective, achieving 30 percent revenue growth is the minimum to give a good report to shareholders and investors," said He.

ZTE reported group revenue of 60.27 billion yuan and mobile terminal sales of 13.07 billion yuan last year.

ZTE's mobile terminals segment is the firm's fastest growing unit, booking a 40 percent rise in sales in the first quarter.

"We hope that within five years, mobile phone revenue will form 50 percent of the group's sales," said He, adding that cellphone revenue was around 20 percent currently.

ZTE said carrier network sales were flat in the first quarter and it is banking on the smartphone boom to boost its mobile phone revenue.

"Most of the interest when we talk to US or European clients is in our smartphones," said He.

Smartphones, which allow consumers to surf the web, send email and run specialized applications on wide, color screens, are increasingly replacing no-frills cell phones for many consumers.

The devices have become a prime battleground for a variety of technology companies seeking to ensure a strong position in the evolving market.

Google Inc displaced iPhone maker Apple Inc to become the second most popular provider of smartphone software in the United States during the first quarter, the latest sign of the increasing competition in the fast-growing mobile market.

He said the open platform nature of Android will enable it to become increasingly popular globally. ZTE is working with China Unicom to launch a $150 smartphone based in the Android operating platform in June this year.