Expansion of 4G networks in China have enabled Chinese equipment vendor ZTE to record an increase of 4.1% in operating revenue in the first six months of the year. The company recorded an increase of 9.3% in its net profit of $270 million.
The Chinese equipment vendor, ZTE and Huawei have been rising in profile at the cost of European vendors, Nokia and Ericsson. While both Huawei and ZTE have reported growth, older and bigger European vendors have been struggling for a few years now. Huawei reported growth of 40% year-on-year. On the other hand, Ericsson has reported a decline of 7% and Huawei has recorded a decline of 10%. However, it must be kept in mind that while both the Chinese vendors boast of a strong devices segment, that is not true in the case of European vendors. Both Huawei and ZTE are known to compete on price and have been consistently grabbing marketshare from the European vendors.
Besides the growth in the domestic 4G market, ZTE has recorded strong growth in cloud-computing, big data and Internet of Things services. ZTE reported a 5.1% year-on-year increase in sales at its “carriers’ networks” division, to reach $4.3 billion. Revenue from its devices segment increased by 2.6% to touch $2.2 billion.
ZTE To Focus On Voice
ZTE also announced a five-year strategy called M-ICT 2.0 which is based on five market trends of Virtualization, Openness, Intelligence, Cloudification and the Internet of Everything (VOICE). The company believes that it will be able to increase its market share by focusing on these trends.
“Guided by the strategies and solutions embodied in M-ICT 2.0, ZTE will drive the rapid, sustainable development of the global ICT industry,” said Dr Zhao Xianming, CEO of ZTE. “As we capitalize on the VOICE trends, we’ll be boldly trying new business models, while reinventing existing practices to capture major market opportunities for ZTE, our partners and customers.”
“The most prominent trends will be Big Data and artificial intelligence (AI) which will automate business processes and add intelligence to support a model of real-time self-healing, self-adjustment and the ability to be proactive and predictive in responding to changing market conditions or crises,” said the white paper which outlined M-ICT 2.0.
These efforts might be focused on record the same success as its colleague, Huawei, which is now firmly established in all the geographies.