ZTE ups R&D spending to $1.4 billion

ZTE spent around $1.4 billion on R&D during the nine months to September 30, with the Chinese tech giant having deployed more than 60 pre-commercial 5G networks worldwide.

Chinese telecommunications technology provider ZTE has published its financial results for the first nine months of 2017, revealing that it spent 9.197 billion yuan ($1.38 billion) on research and development (R&D) during the period.

This accounted for around 12 percent of its total revenue for the nine months to September 30, and followed ZTE in August saying it would be aiming to double its 5G-specific R&D spend to reach 2 billion yuan ($300 million).

"In [the] next three years as a 5G pioneer, ZTE will unswervingly strengthen its R&D investment, and focus on carrier markets and core businesses," ZTE said in a statement.

"The company will keep tracking new technologies and exploring new modes to maintain and improve its leading status in the 5G era."

ZTE said it has now deployed more than 60 pre-5G networks across the globe, as well as over 280 software-defined networking (SDN) and network function virtualisation (NFV) commercial and trial networks worldwide.

For the nine-month period, ZTE reported a net profit of 3.905 billion yuan ($586.6 million), up by 36.58 percent. This followed the company last week predicting a 36.6 percent increase in net profit.

Revenue was up by 7 percent, to 76.58 billion yuan. ZTE is forecasting net profit of between 4.3 billion and 4.8 billion yuan for the full year, which it said would be led by growth in its carrier network and consumer businesses.

The company said it is continuing to invest in 5G, Internet of Things (IoT), and chipsets, with ZTE pointing towards its narrowband IoT (NB-IoT) chips and ecosystem, its 5G platform, and its ultra-large capacity cross platform for optical transmission, along with the Axon M smartphone launched in the United States and Japan last week.

ZTE has also announced partnerships with Orange, and with Wind Tre and Open Fiber to build a 5G pre-commercial network in the 3.6-3.8GHz spectrum band in Europe, as well as partnering with Telenet Belgium to deploy frequency-division duplex (FDD) Massive Multiple-Input Multiple-Output (Massive MIMO) technology.

In August, ZTE said it is committed to pioneering 5G, with plans to enable mobile carriers to transition to the faster network standard worldwide by leading the industry in technology and commercialisation.

"Underpinned by its leadership in 5G technologies, the company is committed to helping carriers deploy the latest network innovations and smoothly evolve from 4.5G networks, supporting the ongoing digital transformation of operators globally," ZTE said.

"The company will be committed to becoming a pioneer in 5G technologies, taking the lead in standardisation, technical perspective, and commercialisation."

During the nine-month period, ZTE also completed 5G New Radio (NR) field trials with China Unicom, attaining data rates of up to 2Gbps for single-user equipment in July. The trial utilised ZTE's pre-commercial sub-6GHz 5G base station at the 3.5GHz frequency with 100MHz bandwidth alongside Massive MIMO technology

The company completed several major 5G scenario trials during phase two of China's national 5G tests in July, including network slicing, in an effort to test its chips and equipment ahead of commercialisation.

ZTE's enhanced mobile broadband (eMBB) across sub-6GHz test attained a peak cell throughput of more than 19Gbps with 28 spatial division streams using a 3.5GHz pre-commercial 5G base station, while its eMBB millimetre-wave (mmWave) test saw a four-stream rate of more than 13Gbps.

It is also working on 5G in Japan, in June announcing a partnership with SoftBank to trial 5G over sub-6GHz spectrum at 4.5GHz across Tokyo, and working with the Japanese carrier on Massive MIMO and 5G NR R&D.

ZTE had announced its plans to release 10Gbps-capable 5G mmWave and sub-6GHz base stations that are compliant with 3GPP and 5G NR standards and identified spectrum bands back in February. It launched its modular 5G IT baseband unit with Intel, which is compatible over 2G, 3G, 4G, and pre-5G networks thanks to the use of SDN and NFV technologies, at the same time.

The Chinese company unveiled its FDD-LTE Massive MIMO solution, powered by its MSC2.0 vector processing chip, at the end of last year after trialling it with China Unicom and China Telecom.

During its Q3 results announcement, ZTE also said it would remain focused on strengthening its "compliance management".

This statement followed ZTE being removed from the US trading blacklist in April by the US Department of Commerce's Bureau of Industry and Security following the company pleading guilty to illegally exporting products to Iran.

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