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ZTE returns to full-year profit normality after 2016 aberration

Without a set of fines to pay, the Chinese networking giant returned to posting more than 4 billion yuan of profit for the full year.
Written by Chris Duckett, Contributor

ZTE has bounced back to post a 2017 full-year net profit of 4.6 billion yuan, following the net loss of 2.4 billion yuan recorded last year.

The company said that last year, following a payment of $892 million to the United States after pleading guilty to breaking US trade sanctions, it would have made 3.8 billion yuan in net profit without the fines.

For 2017, the company reported revenue of 109 billion yuan, up 7.5 percent year-on-year, and received 64 billion yuan from its carrier networks division, 35 billion yuan in the consumer segment, and 10 billion yuan from its government and enterprise busniess.

Operating revenue for the company was broken down to 62 billion yuan from China, and 47 bilion yuan from international markets.

ZTE said it had boosted its research spend to 13 billion yuan for the year, and had a 5G research team with over 4,500 members.

"To date, ZTE has formed strategic partnerships with over 20 operators worldwide to jointly advance the verification and test of 5G technologies, thereby accelerating 5G commercial deployments," the company said.

The company claimed it is leading the globe in 10G-PON market share, is third in IPTV set top box shipments, and claims to be the fourth ranked mobile device maker in US, Canada, and Mexico, as well as being third in Australia.

Last month, ZTE said it would launch 5G devices in either late 2018 or early 2019, with smartphones, tablets, and customer premises equipment already under development.

Alongside its networking compatriot Huawei, ZTE is likely to find itself in the cross hairs of the Trump White House, should the US president choose to impose tariffs on Chinese technology and telecommunications products.

It was reported that Chinese tech companies are being targeted due to arrangements that effectively force US companies to give up their technology secrets in exchange for being allowed to operate in the country, along with other allegations of intellectual property theft.

In February, the heads of the CIA, FBI, NSA, and the director of national intelligence to the Senate Intelligence Committee recommended Americans do not use products from Huawei and ZTE.

"We're deeply concerned about the risks of allowing any company or entity that is beholden to foreign governments that don't share our values to gain positions of power inside our telecommunications networks," FBI Director Christopher Wray said at the time.

"That provides the capacity to exert pressure or control over our telecommunications infrastructure. It provides the capacity to maliciously modify or steal information. And it provides the capacity to conduct undetected espionage."

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