An Interview with Chen Jie, Senior Vice President of ZTE Corporation

An Interview with Chen Jie, Senior Vice President of ZTE Corporation

Though overseas telecom operators slowed down their pace of growth in 2009 due the global financial crisis, the issuance of 3G licenses in China stimulated a new upsurge in 3G network construction. China’s three major telecom operators are competing for full-service operation and for higher wireline and mobile broadband speeds. ZTE has achieved outstanding performance in both optical access and bearer network products. Recently, the journalist of ZTE TECHNOLOGIES interviewed Chen Jie, Senior Vice President of ZTE Corporation.

Journalist: With the adjustment of strategic framework in the telecom industry, more and more operators worldwide have become full-service operators and are seeking to transform into service providers. What has ZTE done to its Wired & Service Products in face of the  transformation trend? Is there any targeted strategy for product development?

Chen Jie: The transformation trend to full-service operation is bound to bring great changes to the industry chain. Equipment vendors support the transformation of operators, speed up the Internet infrastructure construction, and attempt to deploy new Internet applications; terminal vendors take advantage of mobile Internet to strengthen their competition for user interfaces and service platforms and to acquire other enterprises in the industrial chain; IT hardware providers, service operators and Internet service providers are actively building next-generation Internet computing and storage platforms, such as cloud-based server and storage devices; and VAS platform suppliers are using the Service Delivery Platform (SDP) to offer open access to Internet services.

The operators’ full-service operation poses a challenge to equipment vendors. However, international experience allows ZTE to have more space for development. We have helped many well-known global operators gradually transform into full-service operators. Being the equipment vendor that has the widest and most complete product range in the industry, ZTE is capable of providing total solutions at all network levels. This is our advantage. While the operators are seeking to transform into service providers, we keep on growing and consider the future telecom development on the operators’ position. Now we can not only provide operators with custom-made solutions, quality project delivery and engineering service, and series products that support smooth evolution and upgrade, but also adopt the environmental-friendly and energy-saving concepts and technologies to help them implement full-service operation.

The FTTx solution, converged bearer network solution, and Anyservice solution developed by ZTE Wired & Service Product Division help operators build their broadband access networks and bearer networks as required, and offer operable feature-rich value-added services. The major task for full-service operation is to widely deploy broadband services over a high-bandwidth, quality and healthy broadband network. ZTE Wired & Service Product Division has been committed to delivering complete broadband products and solutions. In the field of service provisioning over the broadband network infrastructure, we can help operators deploy multimedia video business on a large scale. We have deployed large-scale commercial IPTV networks in many regions around the world, and believe that we will have a promising prospect in the video service arena.

J: Currently, the xPON technology has been widely recognized by the industry as the first choice for FTTx. Would you please introduce the development of ZTE xPON products in the global market? What do you think of the future of the xPON technology?

Chen Jie: Our ZXA10 xPON optical access products have leading advantages in the global market. Among the world’s first vendors to develop and commercialize optical access products, ZTE has a profound understanding and clear market positioning of the xPON technology. 

We have captured over 45% share in China’s xPON market and have widely deployed our xPON products in many countries and regions such as Italy, Sweden, Hong Kong, Malaysia, Thailand, Saudi Arabia, and Indonesia. As of September 30, 2009, our xPON products had reached 26 million lines in commercial use worldwide, with broadband ports exceeding 10 million lines.

In product design, we take into full consideration the product compatibility and inheritance to protect the operator’s investment. Our existing OLT equipment supports mixed insertion of GPON and 10G EPON. ZTE launched the world’s first next-generation PON prototype, which is a green, converged, future-proof, high-capacity, multi service access platform supporting GPON, EPON and P2P as well as the emerging next generation 10G-EPON and NG-PON in a single shelf.

The basis for the operators to choose ZTE as their strategic partners lies in our continuous investment in the xPON field. We will actively participate in the next-generation nationwide broadband network projects around the world and take it as our own responsibility to significantly improve the broadband access experience for subscribers.  

J: The current hot technologies like cloud computing and Internet of Things (IOT) have attracted increasing attention from operators and equipment vendors. ZTE recently held a forum in Hainan on cloud computing. Could you tell us ZTE’s decisions and measures on service innovation?

Chen Jie: ZTE has been committed to innovating and developing its services and has invested a great deal of resources in cloud computing, IOT and mobile Internet. What we are doing is not exactly an innovation, but a reasonable integration and evolution based on existing technologies. ZTE has been studying the related fundamental technologies for many years. Take cloud computing for example, we have more than 6 years of accumulated experience in studying its core technologies, including virtualization, distributed computing and distributed storage. At the same time, we have developed a series of software and hardware platforms centered on these technologies, and some of the platforms have been widely applied to our products.

In addition to developing our own technologies, we also pay great attention to the cooperation and development of the industrial chain. We have established a comprehensive partnership with global well-known enterprises and research institutes. Recently, we held a forum on cloud computing in Sanya, China’s Hainan province and got support from many partners and research institutes. The forum was also an interactive showcase of the phase achievements we have achieved in cloud computing.

Noticing that cloud computing has achieved great success in the Internet, ZTE is now working hard to promote this technology in the telecom field, or specifically, to apply it to the existing telecom equipment and software service with a view to offering operators new type of “service” products featuring cost-effectiveness, ease of deployment and high reliability. These products are quite different from the original ones in design pattern and business model. Customer-centered design and service-centered business model are the core of these new products.

Now we can provide a full range of cloud computing products including infrastructure, platforms and applications. In particular, we can supply the Unified Open Environment (UOE) platform for rapid development of telecom and Internet services. This platform helps third-party software providers simplify the process and reduce the difficulties in developing converged telecom and Internet services and products, even if they have no solid background in telecom domain. In this way, the software developers can focus their attention on service innovation rather than implementation of technical details in telecom.

We can also offer a large number of cloud computing products and services. On the one hand, we have “clouded” our original value-added service products, allowing them to directly offer cloud computing services; on the other hand, we have applied cloud computing platform directly to the IOT and mobile Internet to deliver cloud computing services.

In addition, we have long recognized the importance of cooperation in the industry chain. To meet the arrival of 3G, ZTE has set up a healthy ecological value chain in the form of “ZTE + CP/SP + terminal partners + operating partners”, effectively supporting the operators’ business growth. To make service innovations under the new circumstance, ZTE also needs cooperation to achieve win-win development. We will continue to expand cooperation with our partners in the new field and to jointly push forward a sustained and healthy development of software and service products.  

J: ZTE’s wired infrastructure solutions, such as FTTx solution and RPR-embedded E-MSTP solution, have won the Infovision Awards at Broadband World Forum Europe. Could you say something about these achievements?

Chen Jie: First of all, we stick to the strategy of sustained product innovation. Being one of the first vendors to develop and commercialize optical access products, ZTE has a profound understanding and clear market positioning of the optical network technology, and attaches great importance to its product strategy. As our optical access series products are the major source of our business and also one of our strategy and development directions, they have been highly valued by top leaders of the company. We have set up R&D centers and innovation labs in Beijing, Shanghai, Nanjing and Shenzhen. By sticking to the strategy of sustained product innovation, we can maintain the leadership and competitiveness of core bearer network technologies and help our customers take the lead in technologies and networks.

Secondly, we stick to the strategy of going deep into the market. Our product management team always dives deep into customers’ needs. Considering the technological innovation and product differentiation, we set up an expert team consisting of the chief engineer, marketing director, product managers, planning managers and marketing managers, who are sent deep into the frontline to do market research. Starting with the market environment, key needs of VIP customers and the competition situation, they excavate our product differentiation highlights and look for market opportunities.

Thirdly, we stick to the strategy of “creating highlights on the basis” in product differentiated innovation. “Basis” refers to basic product functions, such as the advantages of high reliability, high stability, and easy management in the E-MSTP solution. “Highlights” refer to the product differentiated highlights. For example, the E-MSTP solution provides enhanced packet processing capability. Such strategy concept can completely leverage our existing advantages while helping operators fast deploy their optical networks and protect their investment. 

J: It is known that ZTE’s power supply products have seen rapid growth in the past two years. What are the current situation and possible trend for them?

Chen Jie: In 2009, our power supply products took the largest share in China’s telecom power supply market and made strategic breakthroughs in many regions around the world, such as Asia-Pacific, India, South Africa, Europe and so on. Our overseas sales volume in power supply business increased by 200% on a year-on-year basis, laying a solid foundation for future market expansion.

The current financial crisis has led to reshuffling of the global telecom power supply market. To further reduce procurement cost, global MTOs trend to independent model selection and centralized purchase of power supply products, which will create an unprecedented opportunity for fast and large-scale deployments of power supply products worldwide. We continue to increase our investment in the R&D of environmental-friendly, energy-saving and efficient power supply products and offer renewable energy solutions to over 40 operators around the world, including CMPAK, MTN, TMI, ET, ETC and so on; we have  strategic cooperation with high-end operators, providing custom-made and differentiated power supply solutions for them, such as the co-site power supply solution for operators in the Indian market and the 48V/24V co-rack power supply solution for MTN in South Africa.

The direction of our efforts in power supply business in the next 3-5 years is to focus on Tier-1 markets and promote the sales growth in overseas markets, making us among the global mainstream providers in the field of telecom power supply.

J: When cooperating with operators in the Wired & Service Product sector, how does ZTE ensure perfect customer service and high-quality project delivery? What are your comments on the growth of ZTE’s Wired & Service Products in the service area?

Chen Jie: We have set up a global customer service network capable of delivering fast and convenient service to customers worldwide. In ZTE’s 12 overseas platforms, 96 overseas offices and 29 domestic offices, there are maintenance engineers specialized in Wireline & Service Products who can provide various on-site service models such as supervision and software debugging. To ensure quality projects, all service models are operated and managed through PMO.

There are hundreds of turnkey wired network projects we are doing or have finished around the world.  For example, the CADAFE project is a turnkey project in Venezuela. It contains DWDM and MSTP/10G SDH transmission networks, with a total length of 6800Km and features like multi-service support capability, large capacity, high bandwidth, flexible scalability and abundant service interfaces. We adopt the advanced management model to ensure perfect customer service and high-quality project delivery.

With the transformation of global operators, major equipment manufacturers in the industry begin to implement strategic transition, adjust their organizational structure, integrate resources and increase investment in telecom service. Their revenues from telecom service are increasing year by year. One of our strategic goals is to develop from a hardware provider to a provider of excellent software and service products. Our major developments in the service area include better customization of service and terminal products and increased investment in the R&D of Managed Wired & Service Products.  

J: Finally, would you please tell us ZTE’s development vision for its Wired & Service Products and its overall development strategies?

Chen Jie: Our development vision in the Wired & Service Product sector is to become world’s leading provider of new-generation wired network solutions, ranking top three in the global market share in 2012.

“Cost leadership, rapid customization and sustained innovation” are our overall product development strategies. Cost leadership strategy is one of our major development strategies we have insisted on. ZTE’s Wired & Service Product Division has been devoted to reducing product costs, helping customers’ reduce their TCO to cope with the increasingly cost pressure and get a competitive edge in the long run. 

We insist on customer-oriented philosophy to offer customers tailor-made products. Rapid customization is one of our core competitive edges. We also insist on the strategy of sustained product innovation to maintain the leadership and competitiveness of our core technologies, helping our customers take the lead in technologies and networks.