“ZTE is very collaborative with Asia’s governments and regulators in order to help them have a clear picture of what 5G means to their economic growth.”
Telecom Review Asia sat down for an exclusive one-on-one interview with ZTE’s President of Global Sales, Mr Xiao Ming during the ZTE 5G Summit in Vienna to explore its unique strategies on 5G deployment and why market cooperation, especially in Asia, is crucial for the continuous advancement of 5G in the region.
What were the main highlights for ZTE in 2019?
ZTE has had innumerable highlights this year. Firstly, ZTE is listed in the Hong Kong and Shenzhen Stock Exchanges. So we are a public listed company and therefore very transparent. You can see all our performance numbers from both stock exchange reports.
According to our report for the first half of the year, ZTE has performed extremely well and we have calculated immense growth in all segments of our company. If there is one word to describe the highlights for this year, it would be 5G. Specifically in Asia, we are seeing the region become more of a leader than a follower.
In the past, especially with the 3G network, North America was at the forefront of this technology and it was the same for Europe with regards to 4G, while Asia was quite behind in this respect.
However, now we are seeing Asia become the key driver of 5G development especially in the early waves of deployment.
What is unique about ZTE’s approach to 5G deployment in Asia?
In the beginning, South Korea became the first country in the world to roll out 5G, followed by Japan and Australia. This year, China released its 5G licenses to four operators and now we can see our country becoming a major force for 5G deployment.
We have three major operators; China Mobile being in the lead with China Telecom and China Unicom as its challengers. We initially believed that like the European operators, they would only be covering hotspot areas in major cities, but then the two challengers joined forces and announced that they would build a shared 5G network.
In response to this, China Mobile launched an aggressive campaign nationwide for their own 5G network. So as you can see, we are very serious about deployment in Asia. In this region, we have a lot of big markets like India, Indonesia, Malaysia, Thailand and even countries in the Middle East that I believe will act in a similar way. All of these countries are participating in the race towards 5G commercialisation and are highly invested in it.
That is why ZTE is among the key players providing the 5G handset to our customers and they have benefitted greatly from that. We managed to build a state-of-the-art 5G mobile phone that was well perceived by the market.
Based on this, we have a very good position in the Asian market. Regardless of whether the countries have acquired 5G commercial licenses or been assigned spectrums, ZTE is very collaborative with Asia’s governments and regulators in order to help them have a clear picture of what 5G means to their economic growth and what the right strategy should be to facilitate or incentivise the investors and operators to roll out 5G.
So we are quite confident that ZTE would be among the key leaders for 5G in Asia simply because we are investing more into R & D. We used to invest 10% of our global revenue into our R & D and now it’s 14.5%, which makes it a significant increase in the level of investment. With this investment, we are focusing on 5G end to end solutions and that gives us the confidence we need to push through the market sphere.
How will 5G fare in the future seeing that 4G still has quite a strong presence in supporting digital transformation and business continuity?
If you look at 2G and 3G, you can still see elements of these networks co-existing with 4G today, even though they were launched decades ago. So in terms of 5G, we will definitely see a symbiotic relationship between 4G and 5G for the next 5 to 10 years.
In Asia Pacific, 4G investment is rising steadily because previously, this region was lagging behind economically. In big markets like India and Indonesia, we are still seeing a lack of 4G coverage in certain places, which is why more effort is needed in these areas to support 4G.
Undoubtedly, 5G investment will increase, but this does not mean that 4G will be phased out anytime soon. However, we do believe that 2G and 3G will eventually be phased out. For example, China Telecom has already begun to decrease usage of their 3G networks, Bharti Airtel in India are also switching off their 3G networks, so at the end of the day the only remaining networks will be 4G and 5G.
Now, thanks to ZTE’s innovation, we are using the same hardware to support the dynamic spectrum sharing feature which will allow the allocation of frequency that will be dedicated to 4G and 5G. As such, there will be no need to shut down 4G because we will already be equipped with the latest hardware which is compatible with both 4G and 5G networks.
How important is it for ZTE to work closely with different markets in order to achieve optimum success?
I would like to say that it is extremely important and currently in fact, we are working with a few selected markets, of which Asia is one. Our company will be paying attention to larger markets and strategical markets, as well as certain partners. For instance, countries like Saudi Arabia, the United Arab Emirates, Qatar, India, Indonesia, Malaysia and Thailand, just to name a few, will be our prime focus.
There also some key players that have a significant presence in those regions like Telenor, Axiata and Vodafone. We have to put more effort and dedication into these companies to win their support. Once we prove ourselves through our joint success, we would be able to get more support from other operators or markets.
With those measures and strategies in place, we will continuously optimise our operational performance. We need to also be responsible for our investors and we aim to give them higher returns despite the challenges we have faced.