ZTE estimates 36.6 percent increase in profit for first three quarters of 2017

Revenue for the first three quarters of the year increased an estimated 7 percent year on year to 76.6 billion yuan.
Written by Tas Bindi, Journalist on

Chinese telecommunications technology provider ZTE Corporation has reported an estimated 36.6 percent increase in net profit for the nine months ended September 30, 2017.

According to preliminary results, revenue in the first nine months was 76.6 billion yuan, a 7 percent increase from the previous corresponding period.

The company expects to round out the calendar year with a net profit of 4.3 billion yuan to 4.8 billion yuan, turning around its full-year net loss of 2.36 billion yuan for 2016 -- which was reported just days before the US Department of Commerce's Bureau of Industry and Security removed ZTE from its trading blacklist following the company pleading guilty to illegally exporting products to Iran.

Overall net profit for the first half of 2017 increased 29.8 percent year on year to 2.3 billion yuan, while revenue was up by 13.1 percent to 54 billion yuan. ZTE attributed its half-yearly results to growth across its mobile network and smartphone businesses.

The company said in August that its handsets are ranked fourth in the US smartphone market, and within the top five in Australia, Germany, Canada, and Spain.

Earlier this week, the company announced a new smartphone, the ZTE Axon M, offering a dual screen experience with four operating modes: Dual mode, extended mode, mirror mode, and traditional mode. The phone will be available in the next month for a full retail price of $725 and only on AT&T.

In August, the company said it was 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.

During its half-yearly financial results presentation in August, ZTE said its Carrier Networks division accounted for almost 60 percent of all revenue and that it is "further strengthening its investment in key 5G technologies including wireless and 5G bearer networks".

"In the first half, ZTE's pre-5G multi-mode software baseband chips were shipped to top international operators, and the company's IoT chips have been put into interoperability tests with different vendors," the company said at the time.

As of June 30, ZTE had deployed more than 60 pre-5G networks, along with 240 software-defined networks (SDN) and network function virtualisation (NFV) networks across the globe. It announced in July it would double its research and development spend on 5G from 1 billion yuan in 2016 to 2 billion yuan this year.

ZTE spent a total of 6.68 billion yuan on R&D during the six-month period ended June 30, 2017, amounting to 12.4 percent of its total revenue, as it increases its focus on innovations in 5G, IoT, and cloud computing.

The company has 20 R&D centres across Asia, Europe, and North America, and more than 30,000 R&D employees working on 5G, IoT, NFV, SDN, cloud computing, big data, and smart city applications.

In March, ZTE topped the ranks in the World Intellectual Property Organization's annual list on technology patent applications, filing 4,123 applications for patents during 2016, including 1,500 on 5G alone, followed by Huawei, at 3,692; Qualcomm, with 2,466; Mitsubishi Electric, with 2,053; and LG Electronics, with 1,888.

In its home country of China, ZTE claimed in September that it is the leading LTE vendor with more than one-third of the market share in the 4G network, while accounting for one-third of global shipments of TDD-LTE eNB.

In July, ZTE announced it had completed 5G New Radio (NR) field trials with China Unicom. The telco attained data rates of up to 2Gbps for single-user equipment, using its pre-commercial sub-6GHz 5G base station at the 3.5GHz frequency with 100MHz bandwidth alongside Massive Multiple-Input Multiple-Output (MIMO) technology -- along with the global release of its narrowband Internet of Things Intelligent Energy Management System.

ZTE also completed other 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.

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


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