ZTE returns to profit in 2013 as revenue falls by 10.6%

ZTE cites strong improvement in gross margin in carrier network operations and focus on innovation to capitalise on acceleration in global 4G deployments

ZTE returns to profit in 2013 as revenue falls by 10.6%

ZTE Corporation has reported a full-year profit of RMB 1.36bn (£131m) in 2013 compared with a loss of CNY 2.84bn (£275m) in 2012. The company attributed the turnaround to a sharpened focus on key operations such as 4G, while strengthening operational management to generate cost savings and efficiencies. Revenue fell 10.6% to RMB 75.2bn (£7.3bn).

In 2013, ZTE said it prioritised strategically important operations in populous countries, and the development of business with major international operators. The company exercised stringent control over contracts with lower margins, resulting in improved gross margin for international projects.

In China, ZTE secured ‘market-leading positions’in 4G network tenders, as the company benefited from the development of proprietary technology solutions such as Cloud Radio. Internationally, the company’s 4G business accelerated. ZTE was the world’s fastest-growing provider of 4G solutions in 2013, according to research company IHS.

ZTE reported operating revenue of RMB 35.6bn (£3.4bn) from the mainland China market, accounting for 47.4% of the company’s overall operating revenue. International operations accounted for 52.6% of overall operating revenue.

Looking ahead to 2014, ZTE said opportunities as well as challenges will abound in the telecommunications industry amid the full-fledged application of 4G technologies, the amalgamation of ICT industries and continued informatisation.

In connection with carriers’ networks, the full-scale roll-out of 4G network deployment around the world, especially the large-scale construction of 4G networks in China, is set to usher in major new developments for the telecommunications industry, although 3G/4G/WLAN technologies will continue to coexist.

Broadband infrastructure plans by national governments, users’ demand and technology upgrades will drive the construction of global broadband networks, while the building of transmission networks that support wireless or wireline broadband will also continue, ZTE said.


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