ZTE posts 94% rise in full-year net profit as 4G sales surge

Sales of 4G solutions including Cloud Radio, QCell and UBR behind rise in profit to £283 million and 8.3% rise in revenue to £8.7bn in 2014

ZTE posts 94% rise in full-year net profit as 4G sales surge

ZTE Corporation announced a 94% rise in full year net profit, as higher sales of 4G network equipment and smartphones lifted the company’s profit margins. Net profit attributable to shareholders of the listed company increased to RMB 2.63 billion (£283m; US $423.5m) in 2014. Revenue rose 8.3% to RMB 81.47 billion (£8.7bn).

ZTE claimed it was the fastest-growing provider of 4G solutions globally in 2014, thanks to the introduction of innovative network solutions including Cloud Radio, QCell, UBR and Magic Radio, which helped the company win business internationally, and consolidated its leadership in China’s 4G market.

The company added that it ‘is leveraging its strong position to take the lead in research of 5G technology, becoming the first company in the industry to offer pre-5G base stations’.

In 2014, ZTE unveiled its new M-ICT strategy, putting the company in a better position to harness its capabilities in telecommunications, enterprise ICT and consumer devices, to offer customers converged solutions and technology innovations in the era of mobile broadband and the Internet of Things (IoT).

In cloud computing and IT products, ZTE achieved increased penetration of the financial services market, helped by the company’s industry-leading data processing platforms and distributed database technologies. ZTE also posted growth in its data centre products business.

In ZTE’s Mobile Devices Division, the company posted growth in sales of 4G smartphones and 3G mobile phones internationally. ZTE streamlined its smartphone product lines, benefitting from improved branding, channel distribution and services.

In wireline and optical communications products, ZTE achieved increased market share in the optical transport networks market, maintained industry leadership in packet transport networks (PTN), ethernet passive optical network (EPON) products, and posted growth in access terminals and gigabit passive optical network (GPON) products.

ZTE posted revenue of RMB 40.89 billion (£4.4bn) from international operations, accounting for 50.2% of revenue. Operations in China contributed revenue of RMB 40.58 billion (£4.3bn).

Looking ahead

Looking ahead to 2015, ZTE said growth in the traditional telecom market is facing a bottleneck, but due to the high growth of data services, carriers are also transitioning to Internet services.

The mobile Internet era is set to become the main theme of the development of the telecommunications industry, from traditional interpersonal communication, gradually expanding to the communication of people and machines/devices.

In carriers’ networks, operators are demanding network optimisation solutions to increase capacity, maximise performance and depth of coverage. ZTE asserted it is in a strong position to help customers deploy networks with enhanced intelligence and flexibility, through multi-dimensional data management and large-enabled platforms.

In enterprise ICT, converged solutions combining telecommunications and ICT technologies, cloud computing, big data, high-power wireless charging and other emerging technologies are bringing transformative changes to industries and workplaces.

ZTE reported that it will pursue opportunities in rich communication suites (RCS), cloud services, and Smart City to help enterprise customers navigate the "Industry 4.0" or "Industrial Internet" transformation.

ZTE’s innovation laboratory will be the focus for innovation around emerging technologies including smart voice, artificial intelligence, wireless charging, distributed power generation, large data platforms and applications, Internet banking, and mobile payments.

 

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