2020 was a major challenge for all of us around the world. It caused a significant economic downturn and changed people’s lives. Due to this social-distancing situation, people need to stay at home more often, and some even work from home. As a result, the necessity for online communication has increased, and the 5G process of commercialization is accelerating.
Several countries such as China, the US, Japan, and South Korea have adopted 5G as a national strategy and implemented policies to stimulate the development of the 5G industry. Owing to its massive connectivity, high performance, and flexible network architecture, 5G will significantly improve the information infrastructure, and accelerate the upgrade of the industry. What 5G will contribute to is a qualitative change in the history of telecommunications development.
Ranked as one of the four major equipment vendors in the 4G era, ZTE has launched 5G end-to-end product solutions prepared for the arrival of the large-scale 5G network deployment. So far, ZTE has conducted 5G collaboration and testing with more than 40 operators globally.
Why does China’s 5G program is a benefit for ZTE?
China’s 5G network is the most complex globally, and it has one of the largest populations. Deploying 5G in China means that ZTE has to meet various requirements, including strong network performance, multi-coverage scenarios, and the biggest co-construction and shared network in the world. Facing the 5G challenges in China, ZTE successfully asserted an industry-leading position in terms of technical innovation capabilities, product delivery capabilities, and extensive commercial usage capabilities in order to provide client satisfaction in China.
With more than 718,000 5G base stations opened in China so far, ZTE takes about 30% of the 5G market share. Throughout this large increase in 5G SA network deployment in China, ZTE has gained extensive experience and acquired the necessary expertise to help operators around the world deploy the 5G SA network.
According to rcrwireless.com ZTE has earned a lot of practical experience and remains in the first camp of 5G. ZTE took part in the government-led and planned 5G test in China, which is also the greatest regional 5G test project worldwide. The entire project involves three phases: Key Technology Review, System Solution Review, and Technical Solution Review. The company has achieved outstanding results in this project.
China’s accelerated 5G rollout has led ZTE to its best performance seen in years.
ZTE’s Stock Price Increase
With the advantage taken of the development opportunities of 5G and the new infrastructure, the company achieved great success in both market share and revenue growth in the domestic market in 2020. Regarding the international market, ZTE’s gross profit rate increased by 4.9 percentage points to 37.2%, the peak in the last decade, owing to the company’s dedication to constantly enhancing its profitability by sticking to a healthy business operation and seeking out high-value markets.
According to rcrwireless.com, for the year 2020, “ZTE reported operating revenue of RMB101.45 billion, representing a year-on-year increase of 11.8%. Net profit attributable to holders of ordinary shares of the listed company amounted to RMB4.26 billion, a year-on-year decrease of 17.3%, attributable mainly to the relatively substantial growth in net profit for 2019 comprising a one-off income before taxation of RMB2.66 billion from asset disposal during the third quarter of 2019. Basic earnings per share were RMB0.92.”
Chinese telecom equipment vendor ZTE grew fast in 2019 and is continuing to progress at a good pace. In the third quarter of 2019, the company gobbled up 9.7% of the 5G market for telecom devices, compared to the first three months of last year, when it had almost no share. As of 2020, ZTE exceeded Samsung by 13.2% and became the fourth-ranked company in the world. It was the end of the first quarter when telecom equipment companies Huawei and ZTE took nearly half of the total 5G telecom equipment market.
Throughout 2020, while facing pandemic challenges, ZTE firmly upheld its resolutions to focus on large enterprises and technological novelties. All the while giving great attention to operating quality and encouraging business development to promote its global market share. During the year 2020, ZTE’s operating revenue increased compared to the previous year in both the domestic and international markets.
Key advantages that ZTE has as an end-to-end network equipment vendor
Every year, ZTE invests 10% of its revenue in R&D and more than RMB 3 billion in the 5G wireless sector. The company has established a 5G team of experts with more than 4,500 professionals focused on key 5G technologies to simplify the commercial deployment of 5G around the world. As a result, they have achieved technical advantages in mobile communication network research, intelligent network technology research, and core network research.
ZTE’s 36 years of experience in the communications industry has given them a more comprehensive understanding of the 5G network needs as a whole. In fact, these have brought the benefits of ZTE’s end-to-end solution, including service-oriented end-to-end slicing capabilities, on-demand service module deployment, and flexible function orchestration capabilities.
Regarding future product evolution, those products provided by the end-to-end network equipment vendor are expected to have improved integration and development performance compared to those provided by vendors in the single technical domain.
In this challenging year, ZTE successfully maintained excellent market performance thanks to their coordinated employee efforts and solidarity, as well as the customer continued trust. Future ZTE will consolidate its position through innovative initiatives and will strive to develop the digital economy. At the same time, there will be no effort spared by the company to conquer the most demanding challenges in order to upgrade its core competitiveness.
Moreover, for increasing quality growth, the company will actively push forward the digital transformation and intelligent enhancement of society. Besides, they will keep winning and motivating core talents, strengthening their compliance management system as well as reinforcing their internal control and management.
However, now that the future is just a step ahead, ZTE is willing to cooperate both with industrial and environmental partners with the goal of developing a more powerful core competency and mutually achieving high-quality growth.