ZTE Reports Lower Revenue, Profits In Q1


By Juan Pedro Tomás

Chinese vendor ZTE reported operating revenue of CNY21.48 billion (US$3 billion) in the first quarter of 2020, down 3.2 per cent  year-on-year, chiefly due to the negative impact of Covid-19 (coronavirus) lockdown measures in China.

The vendor said that net profit attributable to holders of ordinary shares reached CNY 780 million in the quarter, down 9.6 per cent year-on-year.

The company’s earnings statement didn’t break down revenue by business division.

In a statement, ZTE noted that it continued to strengthen its research and development investment during the period. For the first quarter of the year, R&D costs amounted to CNY3.241 billion, which represented 15.1 per cent of operating revenue, up by 1.2 per cent compared to the same period last year.

Last month, ZTE announced that its 2019 net profit amounted to CNY5.15 billion a year-on-year growth of 173.7 per cent.

The company attributed the positive performance to double-digit growth in Asia and Africa, and strong gains in the vendor’s network group, which offset a decline in revenue in its consumer division.

In 2018, the vendor had recorded a net loss of CNY6.98 billion, as the company had been hit by a US$1 billion penalty imposed by the US, along with operating losses and provisions related to the suspension of its business.

“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,” ZTE said.

“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.”

In the field of terminal devices, ZTE said it has continuously strengthened its 5G terminal devices cooperation with more than 30 operators worldwide.

ZTE also highlighted that it has already obtained 46 5G commercial contracts globally, and established cooperation with over 70 operators worldwide. The vendor noted that these 5G contracts cover major markets across China, Europe, Asia-Pacific and the Middle East.

ZTE said that it has already carried out 5G cooperation with operators including China Mobile, China Telecom, China Unicom, Orange, Telefonica, Wind Tre, Hutchison Drei Austria, and MTN.

In the Chinese market, ZTE has participated in the initial phase of 5G network construction by the country’s three telecom operators. –

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