ZTE reports strong 1st Half 2020 financials; 5G Flexhaul; Automatic Antenna Pattern Control Trial with China Mobile

ZTE reported strong first half financial results, with operating revenues up 5.8 percent from the year before to RMB 47.20 billion and net profit increasing 26.3 percent to RMB 1.86 billion.  Net profit after extraordinary items increased 47.4 percent to RMB 0.9 billion. The operating cash flow grew over 61 percent to RMB 2.04 billion while spend on research and development (R&D) advanced to RMB 6.64 billion.

In the first half of 2020, the company strengthened its cash flow and sales revenue collection management. Its net cash flow from operating activities for H1 2020 is approximately RMB2.04 billion, about 61.1% year-on-year growth. With great commitment to 5G R&D investment, the company’s R&D spending increased to RMB6.64 billion in H1 2020, covering 14.1% of operating revenue.

In light of the coronavirus pandemic and its impact, ZTE decided to push its R&D initiatives and to take advantage of the mega shift brought on by its own ongoing digital transformation. The company also focused on customer service, helping to achieve a steady growth of business.

ZTE put its in-house new-generation core chipsets for access, bearer and fixed-networks into large-scale commercial deployments, further improving the performance, integration and energy efficiency ratio of its chipsets. The company is also focusing on strengthening its algorithm processes, new materials and new technologies in general, as it helps build 5G commercial networks and works towards becoming the “ultimate” cloud company.

In terms of operator network business, ZTE, underpinned by the rapid 5G rollouts in China, achieved revenue of RMB34.97 billion, a year-on-year growth of 7.7%. (Note that ZTE and Huawei were recently banned from the UK’s 5G rollouts).  In 1st half o 2020, the company continuously strengthened the landscape of global network infrastructure.

ZTE facilitates 4G and 5G co-evolution with a comprehensive set

Image Credit: 123RF

Proactively taking advantages of new infrastructure construction and new services, ZTE further explored market growth opportunities, with the revenue of ZTE’s government and enterprise business reaching RMB4.82 billion, a year-on-year growth of 2.5%. The company further explored high-value overseas markets while promoting healthy operations during the period.

In its consumer business, ZTE has continuously strengthened its 5G terminal (mostly smartphones) agreements with over 30 wireless network operators around the world, with a focus on China’s “open market.”

Moving forward, ZTE says it will continuously strengthen the research and development, operate steadily and proactively address the risks and challenges in the global markets, thereby achieving the quality growth. Meanwhile, the company will seize the opportunities of new infrastructure and network technology innovations to expand its market shares, accelerate the digital transformation, and improve the organizational efficiency, so as to become an ultimate cloud company.

The company recently announced its 5G Flexhaul solution, which adopts a minimal forwarding plane architecture and a cloud-native control plane to provide 5G fronthaul, midhaul, and traditional backhaul, flexibly meeting the differentiated needs of 5G multi-scenarios and the ultimate performance challenges of 5G services. Based on a full range of self-developed and the industry’s only “3-in-1” highly integrated 5G bearer chip, combined with the pioneering FlexE Channel technology, ZTE’s 5G Flexhaul solution not only provides ultra-large bandwidth capabilities, but also supports massive connections for different services Provide differentiated SLA guarantee and network slicing capabilities to provide customers with a flexible, scalable, and operable 5G bearer network.

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ZTE’s announced financial report comes one day after the company said that it has completed the trial of Automatic Antenna Pattern Control (AAPC) self-optimization solution in Guangzhou, China along with the Guangzhou branch of China Mobile.

By means of the seamless integration between the AI technology and the network structure optimization, this solution can greatly simplify the optimization and O&M of the 5G Massive MIMO network, thereby effectively improving the efficiency and reducing the costs.

The trial result shows that the network coverage rate has increased by nearly 12%, and the signal strength has increased about 4-to-5 dB while the signal-to-noise ratio has increased nearly 1-to-2 dB and the download rate has risen by about 10%.

The solution is based on ZTE’s intelligent AAPC optimization tool, employing the AI algorithm and the network management platform to quickly search and lock the optimal antenna parameters in complex scenarios. According to the MR (measurement report) data, the solution can accurately evaluate the quality of the network coverage.

In addition, the solution has adopted an AI model to achieve the iterative optimization, and the optimal matching between scenarios and antenna parameters, so as to create an end-to-end operational solution of self-configuration and self-evaluation.

Moving forward, ZTE and China Mobile will further explore various complex scenarios, and develop a larger-scale AI self-optimization system, expecting to accelerate the transformation and upgrade of intelligent networks.

About ZTE:

ZTE is a provider of advanced telecommunications systems, mobile devices and enterprise technology solutions to consumers, operators, companies and public sector customers. The company has been committed to providing customers with integrated end-to-end innovations to deliver excellence and value as the telecommunications and information technology sectors converge. Listed in the stock exchanges of Hong Kong and Shenzhen, ZTE sells its products and services in more than 160 countries.

References:

https://www.zte.com.cn/global/about/news/20200828e1.html

https://www.zte.com.cn/global/about/news/20200827e1.html

https://www.zte.com.cn/china/solutions/201905201708/201905201738/5G_Flexhaul

ZTE facilitates 4G and 5G co-evolution with a comprehensive set of solutions

No stopping Huawei: 1st half 2020 revenues rose 13.1%, to $64.9 billion despite U.S. led boycott; ~60% of biz from China!

Huawei Technologies Co Ltd, the #1 telecom equipment company #2 smartphone maker, reported a 13.1% rise in revenue in the first half of the year, showing slower growth as U.S. officials continue to pressure the company’s suppliers and customers.  Revenue rose to 454 billion yuan ($64.90 billion) in the first half of the year. ($1 = 6.9958 Chinese yuan renminbi or RMB).  That was compared to 401.3 billion yuan revenues the year before. Huawei’s growth rate was down from 23.2% in the first half 2019. Huawei said net profit margins were 9.2%, up from 8.7% in the first half 2019.

Reuters

FILE PHOTO: Huawei’s new flagship store is seen ahead of tomorrow’s official opening in Shanghai, following the coronavirus disease (COVID-19) outbreak, China June 23, 2020.

REUTERS/Aly Song/File Photo: REUTERS

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The Chinese behemoth technology company posted the report a day before United Kingdom officials are expected to order the removal of Huawei gear from the nation’s telecommunications networks.

The results were published as Huawei fights a U.S.-led campaign to ban it from Europe’s 5G markets and choke off its supplies of components based on U.S. design expertise or manufacturing technology.  Speculation has risen that UK authorities will this week move to exclude Huawei from the country’s 5G market just months after saying they would restrict it to 35% of any radio access or fiber broadband network.

The UK government previously thought such restrictions – combined with a ban on Huawei in the intelligent “core” of any network – would mitigate the risk and minimize disruption to service providers reliant on Huawei technology.

But security watch dogs are now worried the latest U.S. sanctions would heighten risks and potentially threaten Huawei’s ability to continue serving UK operators.

While other European governments and operators have similar concerns, Huawei has been able to rely on a 5G rollout in China for sales growth.

Victor Zhang, the company’s head of government affairs, told UK officials last week that Huawei will this year erect about half a million base stations for Mobile, Telecom and Unicom, China’s three national operators.

The company has referred to the scale of the Chinese deployment in refuting suggestions it may run out of components early next year. With the current 35% cap on its UK role, it needs components for only about 20,000 UK base stations, which it can easily supply through existing inventory, said a Huawei spokesperson.

A breakdown of the figures released today indicates growth in all three of Huawei’s business lines.

At the carrier division, which develops network products for communications service providers, sales were up 9%, to RMB159.6 billion ($22.8 billion), despite coronavirus-triggered lockdowns in some of Huawei’s most important markets.

While Huawei did not provide a regional breakdown of the numbers, a Chinese splurge on 5G equipment is likely to have fueled the increase given the pressure elsewhere.

Last year, the Chinese market accounted for nearly 60% of Huawei’s entire business, a figure that proves any European restrictions would have only a limited effect on the company.

Huawei’s relatively small enterprise business managed a 15% increase in sales, to RMB36.3 billion ($5.2 billion), while its device-making consumer business – which last year blamed U.S, sanctions for wiping about $10 billion off sales – said revenues were up 16%, to about RMB255.8 billion ($36.6 billion).

“Our business depends on delivering what our customers need,” said Zhang in a prepared statement about the latest numbers. “These results show that they continue to choose Huawei when they want reliability, security and value.”

Zhang said: “Our priority here is to build a better-connected UK where everyone can benefit from 5G and fiber broadband, no matter where they live.”

BT and Vodafone, the UK operators most heavily reliant on Huawei’s products, have told UK officials they need at least five years to phase out the Chinese vendor.  Anything less and customers would face major disruption, including outages as equipment is replaced, said technology executives during a parliamentary committee last week.

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Huawei’s rise in sales comes after more than a year of pressure from American officials on the company’s suppliers and customers. The company sells 5G networking equipment to carriers and smart phones and laptops to consumers.

American officials placed Huawei on a blacklist in May of last year, restricting sales to the company of U.S.-made goods such as semiconductors. Huawei built up inventories and also continued to design its own chips and have them manufactured by Taiwan Semiconductor Manufacturing Co Ltd and others.

“Huawei has promised to continue fulfilling its obligations to customers and suppliers, and to survive, forge ahead, and contribute to the global digital economy and technological development, no matter what future challenges the company faces,” the company said in a statement on Monday.

In May, U.S. officials announced new rules aimed at constricting Huawei’s ability to self-supply chips, an ability that is critical to its efforts to sell 5G networking gear.

The first half results showed faster growth than Huawei’s first quarter results released in April. For the first quarter, revenues rose by about 1% to 182.2 billion yuan, versus 39% growth posted a year previous. Net profit margin in the first quarter narrowed to 7.3% from about 8% a year earlier.

Huawei did not report unit shipments of phones. Research firm IDC reported Huawei was the second largest phone maker in the first quarter of 2020, with 17.8% market share, behind No. 1 Samsung Electronics Co Ltd and ahead of No.3 Apple Inc.

References:

https://www.usnews.com/news/technology/articles/2020-07-13/huawei-reports-131-rise-in-first-half-revenue

https://www.lightreading.com/asia/huawei-books-$1b-growth-in-h1-profit-despite-us-led-backlash/d/d-id/762360?

Bloomberg Opinion: China Is Winning the 5G Base Station Race

By Anjani Trivedi

China is building tens of thousands of 5G base stations every week. Whether it wins technological dominance or not, domestic supply chains may be revived and allow the country to maintain – and advance — its position as the factory floor of the world, even as Covid-19 forces a rethink in how globalization is done.

By the end of this year, China will have more than half a million of these 5G cell towers on its way to a goal of 5 million, a fast climb from around 200,000 already in use, enabling faster communication for hundreds of millions of smartphone users. By comparison, South Korea has a nearly 10% penetration rate for 5G usage, the highest globally. The much-smaller Asian country had 115,000 such 5G base stations operating as of April.

5G base stations are sprouting all over China. Photo Credit: China News Service/Visual China Group/Getty

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The coronavirus shut down factories and industrial sectors, triggering a rethink of supply chains – away from China. What analysts are calling “peak” globalization and the rise of factory automation could shift production to higher-cost countries in North America and Southeast Asia. It will take a while, but the global dependence on China will come down, the thinking goes. Still, with trade ravaged by Covid-19, other countries and telecom operators will struggle to match China’s spending.

For China, there’s an opportunity to clear the way to forcefully implement its industrial policy agenda, without interference from criticism over subsidies and unfair competition. The so-called Central Comprehensively Deepening Reforms Commission, headed by President Xi Jinping, has approved a three-year plan to give state-owned enterprises yet more sway in the economy.

Beijing’s ambitious programs are still in the construction phase. Macro base stations are the nuts and bolts of building out 5G networks, and will exceed their 4G predecessors by almost 1.5 times. Capital expenditure could peak at $30 billion this year, according to Goldman Sachs Group Inc. analysts, up from $5 billion last year. Beijing wants more local governments and companies to get involved. Each station costs around 500,000 yuan ($71,361) and has a long value chain that includes electrical components, semiconductors, antenna units and circuit boards. The vast number of companies spawned by the project are all contributing to China’s push to get ahead.

For the industrial complex, the onset of 5G will enable greater connectivity between machines and much more data transfer and collection. Fifth-generation technology is expected to have a big impact through increasingly efficient and automated factory equipment, and tracking the movement of inventory and progress of production lines and assets. Manufacturing is expected to account for almost 40% of 5G-enabled industry output, according to  Bernstein Research analysts.

From sensors and data clouds, to chips and collaborative robots and computer-controlled machinery, a whole universe of little-known Chinese companies is coming to the fore. Memory chip maker Gigadevice Semiconductor (Beijing) Inc. has ridden the trend, as has Yonyou Network Technology Co., China’s version of Salesforce.com Inc. For some of these companies, government subsidies are a significant part of earnings, as my colleague Shuli Ren has noted. Stock prices have surged in recent months for firms like Shennan Circuits Co., which makes printed circuit boards, and Maxscend Microelectronics Co., a manufacturer of radio frequency chips. Some are seeing their market capitalization values balloon by billions of dollars as Beijing has upped the ante on new infrastructure.

As Covid-19 absorbs the world’s attention, Beijing’s steady focus on implementing this industrial policy may make China the manufacturer of parts that most countries will need – soon. In other words, it will yet again become the factory floor, mastering the production of all things 5G.

Article originally published at https://www.bloomberg.com/opinion/articles/2020-07-12/china-s-next-trillion-dollar-war-is-over-5g-manufacturing

References:

https://techblog.comsoc.org/?q=China%205G#gsc.tab=0&gsc.q=China%205G&gsc.page=1

https://www.cnet.com/news/5g-will-change-the-world-and-china-wants-to-lead-the-way/

https://www.voanews.com/east-asia-pacific/chinas-long-term-plan-shape-future-technology

https://www.livemint.com/news/world/world-waking-up-to-china-s-true-intentions-to-dominate-5g-us-official-11593171649885.html

Trump and FCC crack down on China telecoms; supply chain security at risk

Excerpt of a Wired article by Justin Sherman (edited by Alan J Weissberger):

The Trump administration is clearly and publicly upping its scrutiny of Chinese-incorporated telecoms. After Washington’s crusade against Huawei, and a forthcoming Senate report that allegedly blasts U,S. regulators for failing to properly oversee Chinese telecoms and their handling of data, these recent actions aren’t exactly surprising. But even if they’re genuinely focused on real national security risks, that doesn’t change the fact that President Trump’s administration doesn’t have a broader strategy.

What the FCC sent to the four companies are called Orders to Show Cause. These orders instruct a recipient firm to demonstrate that its continued operation in the United States doesn’t pose national security risks. Specifically, the ones issued here demand evidence from the four telecoms of why the FCC shouldn’t “initiate proceedings to revoke their authorizations” to operate in the U.S., under Section 214 of the Communications Act.

“The Show Cause Orders reflect our deep concern … about these companies’ vulnerability to the exploitation, influence, and control of the Chinese Communist Party, given that they are subsidiaries of Chinese state-owned entities,” said FCC chair Ajit Pai. “We simply cannot take a risk and hope for the best when it comes to the security of our networks,” he added.

The orders to China Telecom (Americas) CorporationChina Unicom (Americas) Operations LimitedPacific Networks Corporation, and ComNet (USA) LLC gave the companies until May 24 to respond. Included in this answer must be a “detailed description” of the firm’s “corporate governance,” network diagrams describing how its systems are used, lists and copies of interconnection agreements with other carriers, and descriptions of the extent to which the firm “is or is not otherwise subject to the exploitation, influence, and control of the Chinese government”—neither a small request nor a mere formality.

Editor’s Note:  China Mobile, the largest wireless telecom carrier in China is missing from the above list!

China Telecom and China Unicom are both state-owned enterprises, which raises legitimate questions about the Chinese government’s potential access to data. Could it easily request the companies hand over information to intelligence services? Could it compel the firms to insert backdoors on its behalf? What does this presence in the US mean from a resilience standpoint, when U.S. networks could be potentially controlled or manipulated or flat-out shut off in a conflict-like situation?
A China Telecom store in Wuhan, China. (AFP/Getty Images)
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Pacific Networks (of which ComNet is a subsidiary) is owned by the state-owned CITIC Telecom International; the government connection here is almost as direct. Linking its board room to the CCP’s Zhongnanhai headquarters is certainly a bit clearer here than with Huawei, which isn’t outright state-owned but has nonetheless been subject to many questions, especially from the White House, about its Chinese government ties. Again, Beijing’s potential access to data from Pacific Networks Corporation is a legitimate risk.

The clock is ticking for these companies to respond to the U.S. government. China Telecom asked the FCC for a 30-day extension on the original May 24 deadline. Its lawyers got a reply this past week considering extra time, conditioned on specifying by May 11 which parts of the order they want clarified. Meanwhile, the executive branch is forging ahead—per the recently issued executive order—with formalizing a committee to scrutinize foreign telecoms’ presence in the US. Recommendations to the FCC could include modifying a company’s FCC license with “mitigation” measures or even outright revoking it.

Many issues plague the recent executive order. There is broad language about which kind of FCC licenses can be reviewed; the EO’s title would suggest only those of foreign telecoms, but it appears it could be much bigger. The EO also leaves many questions of implementation up to a memorandum of understanding, which is due several weeks from now.

After the order’s publication, multiple people I spoke with had additionally drawn attention to the future head of this newly called-for, yet-to-be-created committee: the attorney general. In different times, perhaps that’d be a reasonable way to balance represented interests, from the intelligence community to the Departments of Defense and Homeland Security. But these are not normal times—and William Barr is hardly known for his impartiality or respect for the rule of law.

Zooming out even further, the U.S. government lacks clear and objective criteria to define and articulate what makes one foreign telecommunications supplier more trustworthy than another. After all, post-Snowden, it’s a bit hard for the U.S. to beat the “other countries backdoor their systems” argument, sans evidence, without raising eyebrows. The Trump administration also continues throwing digital sovereignty policies in other countries—from onerous source code inspection requirements to limited data localization provisions—into the same “protectionist” bucket. Given this reality, how will these telecom reviews be diplomatically handled?

Even the recent FCC orders don’t get especially detailed. Beyond citing that the companies are state-owned or are controlled by those that are state-owned, the documents don’t elaborate much on why these firms cannot be trusted. So, is it more about ownership, corporate governance, and legal authorities in the country of incorporation than it is about technical security issues?

Or for the administration’s China hawks, is it the mere connection to Beijing? Because as the Trump administration and the president in particular continue China-bashing, spreading xenophobic rhetoric (e.g., around coronavirus’ origins), and preferring in general a zero-sum engagement with counterparts in Beijing, it seems more likely that factor overshadows all else.

There are real national security risks that must be weighed around foreign telecommunications companies. Questions of foreign state ownership should be explored, especially as the world becomes more digitally interconnected and the technological supply chain is a growing vector for hacking and exploitation. But foregoing a broader strategy on supply chain security is not an effective, long-term option for parsing these modern digital risks. Despite the recent China focus, these questions of supply chain policy go far beyond Chinese technology firms, and the U.S. government needs a comprehensive and repeatable process for answering them.


China Mobile and Huawei deploy 5G base station at 6,500m on Mt Everest!

China Mobile and Huawei have together built the highest elevation 5G (or any other) base station on this planet– at 6500 meters (21,300 feet) at Mount Everest where there are no roads or trails. [Note that the summit is 8,848 meters, but will be measured again this year].

The base station along with two others at lower elevations, will enable China Mobile to run its 5G wireless network on the world’s highest mountain.  It will surely be a great aid to climbers which had to previously use satellite phones for ultra high altitude communications with their high camps.

Zhou Min, general manager of Tibet branch of China Mobile, said the facility will ensure reliable telecommunication for the activities of mountain climbing, scientific research, environmental monitoring and high-definition live streaming. The building of 5G infrastructure is in tandem with the measuring of the height of the peak, which officially started on Thursday.

“It comes on the 60th anniversary of the first successful ascent of Mount Everest from the northern slope and the 45th anniversary of China’s first official accurate measurement of Mount Everest,” declared the press release. “Significantly, the 5G network on Mount Everest will provide communication services for the 2020 Mount Everest re-measurement.”

How high is Mount Everest in meters, feet, km & miles

The base station launch marks the 60th anniversary of the first successful ascension of Mount Everest from the northern slope. Base stations are now at the Mount Everest Base Camp at 5,300 metres, the Transition Camp at 5,800 metres, and the Forward Camp at 6,500 meters.

A China Mobile technician told state media that the new 5G network is fast enough for climbers and scientists to have 4K and VR live streaming on the mountain.

Huawei’s 5G AAU and SPN technologies were applied at the base stations, managed and maintained by a dozen network specialists stationed there 24/7 at altitudes of 5,300 meters and above.

Huawei claims that its 5G AAU is highly integrated into a compact size, making it easy for deployment and installation and it fits particularly well for infrastructure in extreme environments such as Mount Everest. In this project, a network in the “stand-alone plus non-stand alone” (SA+NSA) mode connects five 5G base stations.Meanwhile, the 5G connectivity is achieved by Huawei’s Massive MIMO technology.

Huawei’s Massive MIMO comes with three-dimensional narrow beams. At an altitude of 5,300 meters, the 5G download speed exceeded 1.66 Gbps, where the upload speed tops 215 Mbps, claims Huawei. Some of the other technologies being employed by the Chinese telecom equipment giant are Intelligent OptiX Network and HoloSens intelligent video surveillance system.  The 5G base station at Everest base camp includes a Gigabit ONT, Huawei’s 10G PON OLT and 200G ultra-high-speed transmission platform, and the HoloSens intelligent video surveillance system.

Pictures of 5G Base station at 6500 meters   Photo credits: Huawei

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The press release concluded as follows:

Huawei strongly believes that technology means to make the world better.  The beauty of Mount Everest can be displayed via 5G high-definition video and VR experience, which also provides further insights for mountaineers, scientists and other specialists into the nature. The ground-breaking establishment on Mount Everest once again proves that 5G technology connect mankind and the Earth harmoniously.

References:

https://www.huawei.com/en/press-events/news/2020/4/china-mobile-huawei-deliver-world-highest-5g

https://www.bloombergquint.com/technology/5g-signal-now-available-on-mount-everest-peak

https://timesofindia.indiatimes.com/gadgets-news/china-mobile-and-huawei-establish-worlds-highest-5g-site-on-mount-everest/articleshow/75493507.cms

 

 

ZTE reports Q1 revenue & profit declines; boosts R&D; telemedicine diagnosis with hospitals to fight COVID-19

ZTE reported operating revenues for the first quarter were CNY 21.48 billion – down from 22.02 billion or -3.23% from the previous year.  Net profit declined to CNY 780 million from 863 million or -9.58% year-over-year.  ZTE’s net profit after extraordinary items rose 20.5% to CNY 160 million.

The company said the quarter was marked by the coronavirus pandemic and measures taken to alleviate the distress cause by it, as well as by the deployment of new infrastructures such as 5G and the Industrial Internet.  ZTE’s R&D costs in the quarter increased to CNY 3.24 billion, comprising over 15.1% of revenues and up 1.2% from the year earlier.

Zte Corporation Stock Pictures, Royalty-free Photos & Images ...

ZTE CORPORATION –a joint stock limited company incorporated in the People’s Republic of China with limited liability. As at 31 March 2020 There were 483,643 shareholders in total (comprising 483,330 holders
of A shares and 313 holders of H shares). 

Here are the shareholders holding 5% or above or top 10 shareholders:

  1. Zhongxingxin Telecom Company Limited
  2. HKSCC Nominees Limited
  3. Bank of China Limited
  4. Hong Kong Securities Clearing Company Ltd
  5. NSSF Portfolio #101
  6. Central Huijin Asset Management Co. Ltd
  7. Shenzhen Huitong Rongxin Investment Co. Ltd
  8. Nanjing Xinchuangxing Consulting and Management Partnership Ltd
  9. New China Life Insurance Company Ltd
  10. Shenzhen Investment Holding Capital Company Ltd
  11. Guangdong Hengjian Asset Management Company Ltd.

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ZTE continued to strengthen its R&D investment to build up its core competitiveness. For the three months ended 31 March 2020, the research and development costs amounted to RMB3.241 billion, 15.1% of operating revenue, increased by 1.2% compared to the same period last year.

During the first quarter of 2020, ZTE has placed great priority on its employee health and global customer services by promptly building and upgrading a remote office and customer service platform for all its employees. Moreover, the company has coordinated with partners to fight against COVID-19 and facilitate the resumption of production with digital means in an orderly manner. The company has been proactively promoting the new infrastructure-related services, and has managed to maintain the steady growth of its businesses during the review period.

Meanwhile, ZTE has been actively practicing social responsibilities. The company has collaborated with operators to guarantee the communication services of the front line against COVID-19. It has constructed 4G/5G networks and telemedicine diagnosis systems for hundreds of hospitals in China.

Teaming up with industry partners, ZTE has been committed to empowering various industries to fight against COVID-19 by leveraging its leading technological strength like 5G and AI. Specifically, ZTE has released 5G remote diagnosis and mobile diagnosis services, as well as the smart video cloud solution for epidemic prevention and control.

Moreover, the company has launched the family “cloud classroom” services to support online education. Featuring high efficiency and collaborativeness, ZTE’s secure remote office solution has enabled users of different industries to have remote office services during the outbreak of COVID-19, thereby facilitating the safe and rapid resumption of work and enhancing economic resilience.
With the acceleration of new infrastructures, such as 5G and the Industrial Internet, ZTE has been actively involved in the deployments of operators’ 5G infrastructure, and constantly scaled up its 5G production capacity. Meanwhile, the company has solidified cooperation with top industry players to promote the digital transformation of power, transportation, finance, government affairs and other key industries.

By the end of the first quarter of 2020, ZTE has consecutively secured significant shares for the 5G RAN, 5G SA core network, 5G transport centralized procurement of China Mobile, China Telecom and China Unicom. The company has constructed 5G demonstration networks in multiple cities in China, achieving Giga+ 5G continuous coverage experience. Moreover, the company has completed 5G commercial deployments in Europe, Asia-Pacific, the Middle East and other major 5G markets.

In addition, ZTE has sustained high growth in market shares in optical networks, as well as in the segments of Metro WDM and Backbone WDM. The company and its partners have jointly explored 86 application scenarios and carried out over 60 demonstration projects on a global scale, building a series of 5G intelligent manufacturing demonstration projects along with top industry players.

With respect to terminal devices, ZTE has unveiled its first 5G video smartphone ZTE Axon 11 5G. The company has continuously strengthened its 5G terminal devices cooperation with more than 30 operators worldwide. It has embarked on the 5G terminal market in Japan by partnering with operators.

Looking ahead , ZTE will pay close attention to the global epidemic situation, and make reasonable coordination accordingly with its global customers and partners to cope with the global epidemic. The company will strongly concentrate on its major businesses while leveraging the opportunities of new infrastructure construction, expecting to create more value for its telco customers.

References:

https://res-www.zte.com.cn/mediares/zte/Investor/20200424/E3.pdf

https://www.zte.com.cn/global/about/news/20200424e1.html

ZTE reports Q1 revenue & profit declines; boosts R&D; telemedicine diagnosis with hospitals to fight COVID-19

ZTE reported operating revenues for the first quarter were CNY 21.48 billion – down from 22.02 billion or -3.23% from the previous year.  Net profit declined to CNY 780 million from 863 million or -9.58% year-over-year.  ZTE’s net profit after extraordinary items rose 20.5% to CNY 160 million.

The company said the quarter was marked by the coronavirus pandemic and measures taken to alleviate the distress cause by it, as well as by the deployment of new infrastructures such as 5G and the Industrial Internet.  ZTE’s R&D costs in the quarter increased to CNY 3.24 billion, comprising over 15.1% of revenues and up 1.2% from the year earlier.

Zte Corporation Stock Pictures, Royalty-free Photos & Images ...

ZTE CORPORATION –a joint stock limited company incorporated in the People’s Republic of China with limited liability. As at 31 March 2020 There were 483,643 shareholders in total (comprising 483,330 holders
of A shares and 313 holders of H shares). 

Here are the shareholders holding 5% or above or top 10 shareholders:

  1. Zhongxingxin Telecom Company Limited
  2. HKSCC Nominees Limited
  3. Bank of China Limited
  4. Hong Kong Securities Clearing Company Ltd
  5. NSSF Portfolio #101
  6. Central Huijin Asset Management Co. Ltd
  7. Shenzhen Huitong Rongxin Investment Co. Ltd
  8. Nanjing Xinchuangxing Consulting and Management Partnership Ltd
  9. New China Life Insurance Company Ltd
  10. Shenzhen Investment Holding Capital Company Ltd
  11. Guangdong Hengjian Asset Management Company Ltd.

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ZTE continued to strengthen its R&D investment to build up its core competitiveness. For the three months ended 31 March 2020, the research and development costs amounted to RMB3.241 billion, 15.1% of operating revenue, increased by 1.2% compared to the same period last year.

During the first quarter of 2020, ZTE has placed great priority on its employee health and global customer services by promptly building and upgrading a remote office and customer service platform for all its employees. Moreover, the company has coordinated with partners to fight against COVID-19 and facilitate the resumption of production with digital means in an orderly manner. The company has been proactively promoting the new infrastructure-related services, and has managed to maintain the steady growth of its businesses during the review period.

Meanwhile, ZTE has been actively practicing social responsibilities. The company has collaborated with operators to guarantee the communication services of the front line against COVID-19. It has constructed 4G/5G networks and telemedicine diagnosis systems for hundreds of hospitals in China.

Teaming up with industry partners, ZTE has been committed to empowering various industries to fight against COVID-19 by leveraging its leading technological strength like 5G and AI. Specifically, ZTE has released 5G remote diagnosis and mobile diagnosis services, as well as the smart video cloud solution for epidemic prevention and control.

Moreover, the company has launched the family “cloud classroom” services to support online education. Featuring high efficiency and collaborativeness, ZTE’s secure remote office solution has enabled users of different industries to have remote office services during the outbreak of COVID-19, thereby facilitating the safe and rapid resumption of work and enhancing economic resilience.
With the acceleration of new infrastructures, such as 5G and the Industrial Internet, ZTE has been actively involved in the deployments of operators’ 5G infrastructure, and constantly scaled up its 5G production capacity. Meanwhile, the company has solidified cooperation with top industry players to promote the digital transformation of power, transportation, finance, government affairs and other key industries.

By the end of the first quarter of 2020, ZTE has consecutively secured significant shares for the 5G RAN, 5G SA core network, 5G transport centralized procurement of China Mobile, China Telecom and China Unicom. The company has constructed 5G demonstration networks in multiple cities in China, achieving Giga+ 5G continuous coverage experience. Moreover, the company has completed 5G commercial deployments in Europe, Asia-Pacific, the Middle East and other major 5G markets.

In addition, ZTE has sustained high growth in market shares in optical networks, as well as in the segments of Metro WDM and Backbone WDM. The company and its partners have jointly explored 86 application scenarios and carried out over 60 demonstration projects on a global scale, building a series of 5G intelligent manufacturing demonstration projects along with top industry players.

With respect to terminal devices, ZTE has unveiled its first 5G video smartphone ZTE Axon 11 5G. The company has continuously strengthened its 5G terminal devices cooperation with more than 30 operators worldwide. It has embarked on the 5G terminal market in Japan by partnering with operators.

Looking ahead , ZTE will pay close attention to the global epidemic situation, and make reasonable coordination accordingly with its global customers and partners to cope with the global epidemic. The company will strongly concentrate on its major businesses while leveraging the opportunities of new infrastructure construction, expecting to create more value for its telco customers.

References:

https://res-www.zte.com.cn/mediares/zte/Investor/20200424/E3.pdf

https://www.zte.com.cn/global/about/news/20200424e1.html

Europe and U.S. to delay 5G deployments; China to accelerate 5G

Up until the COVID-19 pandemic hit the world hard in late February, 5G seemed a priority for most wireless network operators. Now, with across the board cutbacks everywhere, it will be much further down the must do list for 2020.

In the absence of any new 5G applications or completion of 3GPP 5G Phase 2 and ITU-R IMT 2020, 5G was not expected to ramp this year, despite ridiculous hype and false claims (especially ultra low latency which has not yet been specified let alone standardized yet).

Now the new technology faces an unprecedented slow down to launch and expand pilot deployments.  Why? It’s because of the stay at home/shelter in place orders all over the world.  Non essential business’ are closed and manufacturing plants have been idled.  Also, why do you need a mobile network if you’re at home 95% of the time?

One reason to deploy 5G is to off load data (especially video) traffic on congested 4G-LTE  networks. But just like the physical roads and highways, those 4G networks have experienced less traffic since the virus took hold.  People confined to their homes need wired broadband and Wi-Fi, NOT 4G and 5G mobile access.

“5G deployment in Europe will certainly be delayed,” said Eric Xu, one of Huawei’s rotating CEOs, during a Huawei (private company) results presentation today.  Xu also told reporters the delays could last until “the time when the pandemic is brought under control.”

Eric Xu said the current crisis would “certainly” delay 5G rollouts

Huawei’s Eric Xu said the current crisis would “certainly” delay 5G rollouts

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Answering questions about its annual report, published on Tuesday, Huawei vice-president Victor Zhang said there would “definitely” be an impact but it would likely be worse in Europe than in the UK.

A few data points from European telcos in the aftermath of COVID-19:

  • On March 20, the UK’s BT reported a 5% drop in mobile data traffic, compared with normal levels.
  • Today, Belgian incumbent Proximus said capital expenditure would go down this year to offset the impact of COVID-19 on profits.
  • A growing number of European countries are delaying 5G spectrum auctions, as restrictions related to the Covid-19 pandemic make it difficult to maintain planning. The EU’s deadline of June for the release of the 700 MHz band for 5G will be missed by several countries, including Spain and Austria.
  • In Portugal, MEO, NOS and Vodafone Portugal now face a further wait for frequency rights in the 700MHz, 900MHz, 1800MHz, 2.1GHz, 2.6GHz and 3.6GHz bands
  • German company United Internet’s CEO, Ralph Dommermuth, said that the construction of subsidiary 1&1 Drillisch’s 5G network would experience delays due to current measures adopted in the country to prevent a further spread of the COVID-19 pandemic in Germany, local paper Handelsblatt reported.
  • In Sweden, which has controversially avoided a total lockdown, telecom incumbent carrier Telia has now cut dividends as it prepares for a hit.

Huawei’s statements imply the U.S. will also face a delay in 5G rollouts.  It has overtaken Italy as the country with the highest number of coronavirus infections, and its response to the outbreak has been lackluster and confusing at best, horrendous at worst.

As a mobile-only network equipment vendor, Ericsson looks the most exposed to a 5G slow down.  More than 50% of its business is generated in Europe and the Americas, where the rate of COVID-19 infections is rising.

Although less reliant on the 5G wireless base station business than Ericsson, Nokia could also be in trouble due to the slowdown in 5G deployments.  Approximately 30% of its sales came from North America last year, and another 28% from Europe.

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“After the pandemic was brought under control, China has accelerated its 5G deployments,” according to Huawei’s Xu.

China has accelerated its own 5G deployment after the number of cases of Covid-19 subsided, according to Xu, but in other countries, it would depend “on several factors”, including whether telecoms companies had the budget and resources to “win back the time” lost.

Indeed, China Mobile this week awarded 5G contracts worth $5.2 billion with approximately 90% of the contracts going to Huawei and ZTE. Ericsson won contracts worth RMB4.2 billion ($593 million) and small local vendor CICT will net RMB965 million ($136 million). Nokia reportedly bid, but failed to win any of the contracts from China Mobile.

This centralized procurement involves 28 China provinces, autonomous regions and municipalities directly under the central government. According to C114, the total demand is 232,143 5G base stations.  At the end of February, the number of 5G base stations owned China Mobile has exceeded 80,000.

References:

https://www.bbc.com/news/technology-52108172

https://www.lightreading.com/5g/covid-19-will-help-china-to-extend-its-5g-lead/d/d-id/758596?

https://www.lightreading.com/5g/5g-auctions-delayed-across-europe-due-to-covid-19/d/d-id/758606?

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9 April 2020 Update:

5G is looking like a casualty of COVID-19

All 5G companies had accomplished was the design of a technology that provides faster connections and additional capacity on smartphone networks. A few have already been launched, and South Korea, the most advanced market, already has millions of subscribers. Yet local news reports suggest many have been underwhelmed by the 5G experience. For service providers, it has had minimal impact on sales while marketing and rollout costs have made a huge dent in profits.

This will discourage 5G investment in countries under COVID-19 lockdown. As customers downgrade to cheaper services and dump TV sports packages rerunning last year’s highlights, many operators will cut spending. Concerned about exposing field workers to unnecessary health risks, they will prioritize the maintenance of networks already used by the majority. Moreover, people confined to their broadband-equipped homes for most of the day have little use for mobile data networks. Any additional investment is likely to go into fiber-optic equipment.

5G launches will also be delayed in European markets that have postponed auctions of the spectrum needed to support services. Austria, the Czech Republic, France, Portugal and Spain are all now reported to have delayed auctions. Without spectrum, 5G will obviously not fly.

Fear mongering stories linking 5G to illness could also hinder rollout. Countries such as Belgium and Switzerland have imposed limits on the use of 5G antennas amid lingering concern that radiofrequency emissions are carcinogenic. The World Health Organization says mobile frequencies are too low to be dangerous, but activists are unconvinced.

In the UK, operators now have to contend with the ludicrous suggestion that 5G networks transmit COVID-19. After misinformed tweets by celebrities including Amanda Holden, a British actress and reality-TV regular, 5G masts were burnt in the cities of Belfast, Birmingham and Liverpool.

China, meanwhile, remains determined to erect more than half a million 5G base stations by the end of this year. Claiming to have beaten COVID-19, it has lifted restrictions on the movement of people and reopened its factories. For the equipment makers building those 5G networks, this investment program could be essential medicine. Just last month, China Mobile, the country’s largest operator, awarded 5G contracts worth $5.2 billion. Unfortunately, with almost 90% of the work going to domestic suppliers Huawei and ZTE, Western vendors will not be able to count on China for a boost.

https://www.lightreading.com/5g/5g-is-looking-like-a-casualty-of-covid-19/a/d-id/758804?

 

 

 

 

China Telcos Lose Subscribers; 5G “Co-build and Co-share” agreement to accelerate

Decrease in China’s Mobile Subscribers:

China’s wireless carriers are reporting substantial drops in subscribers as the coronavirus crisis reduces business activity.

China Mobile Ltd., the world’s largest wireless carrier, reported its first net decline since starting to report monthly data in 2000.  China Mobile subscriptions fell by more than 8 million over January and February, data on the company’s website show.

China Telecom Corp. said it lost 5.6 million users in February, while China Unicom Hong Kong Ltd. subscribers fell by 1.2 million in January.

The across the board China subscriber slump indicates that the coronavirus pandemic crisis, which first emerged in China late last year, is crimping growth, even at businesses that provide essential services and earn monthly revenue.  ARPU will likely also decline, according to analysts.

Chris Lane, an analyst at Sanford C. Bernstein & Co said  that part of the decrease in wireless subscribers could be due to migrant workers — who often have one subscription for where they work and another for their home region — canceling their work-region account after the virus prevented them from returning to work after the Lunar New Year holidays which began in late January.

While the drop in users is unusual, the total is small relative to total wireless subscriptions, which have risen to a combined 1.6 billion for the three carriers.  Things may improve starting this month as work in factories and other businesses in China resumes, Lane said.

Net income fell 9.5% last year at China Mobile, partly on government mandates to cut prices and improve service, but also due to a spike in financing costs – up from RMB144 million ($20.2 million) to RMB3.25 billion ($460 million).

The company, which reported earnings last week, told analysts revenue would remain stable this year, a sign management was not worried about the fall in subscribers.

China Unicom overcame flat revenue growth to post an 11.1% increase in net earnings for 2019. The state-owned telco slashed opex by 22% and marketing cost by 5% to record a 11.3 billion yuan ($1.6 billion) full-year profit.

“In 2019, the domestic telecommunications industry development experienced a short-term pain with weak revenue growth and pressure on industry value,” Chairman and CEO Wang Xiaochu said.

China Unicom 5G network

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Co-build and Co-share Agreement:

In September 2019, China Unicom entered into a cooperation agreement with China Telecom to jointly build one 5G access network across the country. China Unicom would be doubling it’s own 5G network coverage, bandwidth, capacity and transmission speed, providing users with better experience.

China Unicom said it will actively step up the “co-build and co-share” with China Telecom in areas such as 4G indoor distributed antenna systems, server rooms, optical fiber and pipelines to further enhance network advantages and corporate value.Image result for pic of china telecom

References:

https://www.bnnbloomberg.ca/china-s-mobile-carriers-lose-15-million-users-as-virus-bites-1.1410626

https://www.telecomlead.com/5g/china-unicom-reveals-5g-network-capex-plans-94530

China Mobile has 15.4 million 5G customers; 5G+ is primary focus area

China Mobile today published its 2019 annual financial report, stating that the company’s operating revenue reached CNY745.9 billion -a year-on-year increase of 1.2% – and its net profit was CNY106.6 billion ($15 billion) – a year-on-year decrease of 9.5%.

The fall in net profits was largely due to a spike in financing costs – up from RMB144 million ($20.2 million) to RMB3.25 billion ($460 million).

Operating revenue was just 1.2% higher, at RMB745.9 billion ($104.8 billion), while telecom services revenue improved by a meager 0.5%.

A few highlights:

  • The largest China telecom network provider acquired 15.4 million 5G customers in the first three months after launch.
  • In 2019, China Mobile’s mobile users increased by 25.21 million, reaching a total of 950 million. Its mobile Internet data traffic increased by 90.3% year-on-year and its mobile Internet DOU reached 6.7GB.
  • Wireline broadband customers grew by 30.35 million to a total of 187 million.
  • China Mobile’s family broadband users reached 172 million, an increase of 17.1% year-on-year. Its family broadband comprehensive ARPU reached CNY35.3.
  • At the end of 2019, China Mobile’s government and corporate clients reached 10.28 million, a year-on-year increase of 43.2%. The company’s international business revenue saw a year-on-year increase of 31.4%.

Mr. Yang Jie, China Mobile’s Chairman of the Board said in the press release:

“We were faced with a challenging and complicated operating environment in 2019 where the upside of data traffic was rapidly diminishing and competition within the telecommunications industry and from cross-sector players was becoming ever more intense. Coupled with this was the impact of government policies, including the continued implementation of the “speed upgrade and tariff reduction.”

Against this backdrop, all of us at China Mobile joined together to overcome these hurdles and work towards our ultimate goal of becoming a world-class enterprise by building a dynamic “Powerhouse”. This was centred on the key strategy of high-quality development, supported by a value-driven operating system that leverages our advantages of scale to drive further convergence, integration and digitization across the board.

We structured our organization to enable effective and synergetic capability building and collaborative growth, while nurturing internal vitality. In addition, we further implemented our “5G+” plan to spearhead the development of “four growth engines”, comprising the “customer,” “home,” “business” and “new” markets. These measures have helped us obtain positive momentum in overall operating results, which was a hard-earned achievement for us in a tough year.”

Yang noted that the COVID-19 epidemic had driven more and more businesses and consumers online and encouraged greater takeup of digital and cloud-based services.  “We will leverage these opportunities, as well as the 5G network, to further develop the information and communications services market.”

Business Market:

The “business” market was China Mobile’s new growth engine and we strove to nurture new growth points by fully leveraging our cloud and network convergence advantages, building on our DICT (data, information and communications technology) infrastructure comprising IDC, ICT, Mobile Cloud, big data and other corporate applications and information services. Buoyed by active promotion of our “Network + Cloud + DICT” smart services, customers and revenue recorded rapid growth.

As of the end of 2019, the number of corporate customers increased to 10.28 million, representing year-on-year growth of 43.2%.

Focusing on key sectors such as industry, agriculture, education, public administration, healthcare, transportation and finance, the company deepened go-to-market resources to promote DICT solutions that cater to sector-specific scenarios. This strategy has boosted DICT revenue to RMB26.1 billion, or growth of 48.3% year-on-year, contributing a larger portion of our overall revenue.

“5G+” Achieved a Good Start:

China Mobile sped up the development of 5G and have been fully implementing its “5G+” plan since June 2019, when we were granted the 5G licence. These initiatives have shown good initial results.

The company actively participated in setting international standards for 5G to drive technological development. It led 61 key projects in relation to 5G international standards setting and own more than 2,000 5G patents. It also helped to continuously strengthen the Standalone 5G (within 3GPP Release 15 and 16).

Its “six international standards (3GPP specifications are not standards) on 5G system architecture” and “38 international standards including 5G NR (New Radio) terminals and base station radio frequency” scooped all the top prizes in the 2019 Science and Technology Awards presented by the China Communications Standards Association, demonstrating our leadership in 5G communications standards.

At the same time, the company accelerated the implementation of “5G+” by formulating well- coordinated development of 5G and 4G. It constructed and began operating more than 50,000 5G base stations and launched 5G commercial services in 50 cities. Emerging technologies such as AI, IoT (Internet of Things), cloud computing, big data and edge computing were assimilated into 5G (5G+AICDE) and developed more than 200 critical capabilities, while making breakthroughs in over 100 5G joint projects.

In terms of 5G+Eco, we aimed to develop the ecosystem with other industry players. Through its 5G Innovation Centre and 5G Industry Digital Alliance, more than 1,900 partners were attracted.

The 5G Device Forerunner Initiative, guiding manufacturers to launch 32 5G devices, was established. The level of maturity was basically the same between the 2.6 GHz and 3.5 GHz industry chains. Benefiting from forward-looking planning and effective execution, we expanded 5G+X, where “X” stands for the wider application of 5G, in applications that have been adopted by a plethora of industry sectors, as well as the mass market. For the latter, we launched exclusive plans for 5G customers and feature services such as ultra-high definition videos, cloud-based games and full-screen video connecting tones. As of the end of February 2020, our 5G plans attracted 15.40 million package customers – maintaining an industry-leading position.

In terms of vertical sector, China Mobile explored the possibility of combining 5G with AICDE capabilities, extending collaboration in the industry and deep-diving into classic manufacturing scenarios to develop our leadership in 5G smart manufacturing, 5G remote medical services and 5G automated mining, among other sectors. A total of 50 group-level demo application projects were implemented.

Looking ahead, 5G presents infinite possibilities. China Mobile will continue to take a systematic approach to planning and steadily implementing our “5G+” initiatives. The company will speed up technology, network, application, operations and ecosystem upgrades, accelerate industry transformation by converging technologies, integrate data to strengthen information transmission in society, and introduce digitized management to build the foundation for digital society development. By doing so, China Mobile will seek more extensive 5G deployment, covering more sectors and creating greater efficiency and social value.

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UPDATEhttps://techblog.comsoc.org/2020/03/23/china-telcos-lose-subscribers-5g-co-build-and-co-share-agreement-to-accelerate/

References:

https://www.chinamobileltd.com/en/file/view.php?id=226450

https://www.chinatechnews.com/2020/03/19/26442-china-mobile-net-profit-down-9-5-in-2019

https://www.lightreading.com/asia/china-mobile-reports-154m-5g-customers/d/d-id/758329?