Chinese telecommunications colossus ZTE has announced it plans on raising $2bn through share placement in an effort to generate the capital it requires in order to accelerate its 5G technology development.
ZTE has made no secret of its lofty ambitions to be a global leader in 5G - and is confident it will be the first vendor to release a 5G-capable device by the end of this year. It will invest all the capital accumulated through its share placement initiative into further 5G research and development.
In a statement issued to the press, ZTE made it clear that it will spend all of its expected proceeds on technology research and product development in relation to 5G network evolution. In addition to this, ZTE claimed that it will spend a total of CNY42.9 billion on 5G over a three-year period.
ZTE which is headquartered in Shenzhen has fillings with both the Shenzhen and Hong Kong stock exchanges. The Chinese vendor has disclosed that it intends on raising capital by issuing no more than 687 million of its shares to no more than ten specific subscribers. The pricing and subsequent issuing of the shares will be determined by China Securities Regulatory Commission.
The race to develop and deploy 5G-ready network equipment is a competitive environment and ZTE faces stiff competition from domestic rivals such as Huawei and global entities such as Nokia and Ericsson. However, ZTE has declared that it aims to secure a leading position in the 5G sector by continuing its aggressive approach towards investment in research and developments as well as marketing for its core segments.
A ZTE representative has said that the Chinese firm has identified the next three years as a key period in the formulation of the next-generation technology. He said, “With the global leading position in 5G network sector, the company expects that 2018 to 2020 will be a crucial period for the formulation and industrialization of the global standard for 5G technology.”
Chinese technology firms are currently under attack from the US government amidst claims the country is a huge security risk. In recent weeks, Huawei has seen potential deals with AT&T and Verizon collapse allegedly due to regulatory pressure. Whilst a Republican congressman tabled a proposal which said no US departments should be using equipment or services provided by Huawei or ZTE.