ZTE Stakes Out Its LTE Credentials

China's ZTE Corporation has made a huge investment in developing TDD-LTE equipment and solutions, and now it is looking to reap the benefits by winning contracts in the European and American markets.

“Our target is to achieve over 15 commercial LTE contracts in Europe in 2011,” says Li Jian, ZTE’s general manager, CDMA and LTE Product Line. It’s a bold statement of intent and a measure of the increasing confidence the Chinese telecommunications equipment and network solutions provider now has on the world stage. The reasons for this confidence are threefold, according to Li Jian. “It is because ZTE will continue to contribute 10% of its revenue to investment in LTE development. We already have 4,000 engineers and research staff, so this is a very special team devoted to LTE development.”

ZTE has spent a total of RMB 13 billion over the last two years on R&D alone, and the company maintains 15 R&D centres in Sweden, the U.S., France, India, Shenzhen, Shanghai and Beijing.

Li Jian says: “Also, ZTE is very mature in LTE knowledge with a full end-to-end LTE solution and technology. ZTE is the leading software defined radio (SDR) vendor. We came up with SDR, so we think we have a strong ability to lead on this new platform and that’s why we are confident we can win 15 contracts in Europe this year.”

“The third reason ZTE is confident it will hit this target,” she continues, “is that ZTE can customise its LTE solution to whatever the operator’s requirements are. So, operators can deploy ZTE’s LTE equipment on top of their existing infrastructure. This will save on deployment costs and maintenance costs in the evolution from one generation to the next.”

Opinions vary, depending on  what is being measured and how, but a report in February by Open Vista Consulting ranked ZTE among the top three vendors for LTE infrastructure, alongside Ericsson and Nokia Siemens Networks, with 21% of the LTE market.

ZTE is beginning to ride a wave of interest in TDD-LTE, the alternative to FDD-LTE, which is being heavily promoted by the world’s largest operator, China Mobile. The manufacturer is one of several companies that have worked closely with China Mobile over the last three years to develop TDD-LTE.

This commitment has led to a startling jump in influence in terms of the number of international patent applications from ZTE (and indeed, China generally). According to the World Intellectual Property Organisation, ZTE jumped from 23rd place to second in 2011 for international patent applications.

By the end of December 2010, ZTE had a total of 1,863 patent applications registered. It has declared 235 essential LTE patents to ETSI, which accounts for 7% of the total so far. This has propelled ZTE into becoming one of the main holders of basic LTE patents.

The continued investment in R&D has also begun to translate into wider commercial success beyond China despite the economic downturn of the last two years. The percentage of overseas revenue grew from 44% in 2006 to 54.1% in 2010 (US$5.7bn).

Global revenue from principal operations reached US$10.6bn in 2010, up 21% on 2009. Net profit was US$490.7m. According to a Frost & Sullivan report “Insights on 2010 Market Performance”, ZTE had the highest compound annual growth rate among the top vendors―28% between 20082010 and 37.4% between 20062010. It secured contract sales worth up to RMB100 billion in 2010.

“We have 15 commercial contracts and 65 trials around the globe,” reports Li Jian. “But this year ZTE will focus on the high-end markets, such as Europe and the USA. We are looking for deeper and more intensive penetration of these markets.”

Li Jian says that some of the contracts will be undertaken by ZTE itself, while others will be won in partnership. But ZTE will provide the end-to-end solutions.

ZTE showcased its range of LTE base stations at Mobile World Congress in February as well as a number of innovations. Along with its distributed base stations, it also introduced what it claims is the industry’s first all-in-one micro base station, as well as the all-in-one indoor/outdoor macro base station.

The rollout of LTE is beginning to take off in Europe and America, but it is still early days. “In 2009, there were some LTE deployments in European and US markets, but it grew very slowly,” says Li Jian.

“But in 2010, we found that in the second half the trials by networks of LTE were becoming rapid. This year, the operators in Europe and the USA will increase the development of LTE, but it will not reach the explosion point.”

Problems with the availability of frequency and licences for LTE are delaying deployment. The UK 800MHz and 2.6GHz auction will not take place until 2012, for example. The lack of LTE-enabled devices other than dongles for laptops is also slowing down the arrival of LTE. But 2012 is likely to be the year it really takes off.

“Different countries will have different situations,” says Li Jian. “It’s true that some, if not most, are still benefitting from their 2G and 3G networks, but the development of LTE will not be stopped now. The advantages of fast mobile broadband will benefit the operators and enhance their operational capabilities.”

The advantage for ZTE is that over the last year many operators have started to show a keen interest in the TDD-LTE option. FDD and TDD are very similar and can share the same chip. However, FDD uses two frequency bands and TDD just one.

There is more TDD frequency available, it is less used and generally speaking cheaper to get for the operators. And for WiMAX operators, it is easier to convert to TDD-LTE than FDD-LTE should they wish to do so. Hence, there is growing attraction of TDD for mobile carriers. What ZTE’s SDR platform provides is a multimode platform that allows operators to choose FDD or TDD as and when they are ready to do so. But as Li Jian points out it does more than that―it can support the existing technologies too.

“Our base band units (BBUs) connect all the different technologies, so they can support GSM, UMTS, TD-LTE, FDD-LTE and WiMAX in one platform,” says Li Jian, “and that will provide a big cost saving for operators.”

Operators will continue to run their 2G and 3G networks in conjunction with LTE. But ZTE’s SDR platform allows them to invest in new network infrastructure now that will cut network CAPEX and OPEX and future proof them for LTE when it comes on line.

“SDR is a uniform platform―you can do anything on it. You can satisfy any operator requirement, so that will help them save money and satisfy their business development needs at the same time. We try to reuse existing facilities and systems as much as possible,” says Li Jian.

An example of this is the work ZTE has done with Hong Kong mobile operator CSL. In November 2010, CSL launched a commercial LTE/DC-HSPA+ network. “CSL has two GSM, two UMTS and two LTE bands, but it is all based on one platform―you no longer need separate big sized GSM units,” says Li Jian.

The availability of a wide and affordable range of LTE-enabled devices is also critical for the future of the LTE market. But Li Jian says that the development of terminals is growing very fast, “so ZTE will try to develop and provide a total solution to solve the problem and make it easier for operators.”

Besides terminal products, equipment and services, ZTE has invested in chip development. At the end of 2010, ZTE was the first to launch a Qualcomm chipset based on TDD-LTE terminals and achieved a download rate of nearly 100Mbps. “It is this kind of thing that makes ZTE different from other vendors,” says Li Jian.

The rollout of LTE may be protracted, especially in Europe, but ZTE looks to be well positioned to grab a large share of the market, if the number of operator trials it is picking up is anything to go by.

Recent ZTE technology advances showcased at MWC:

■     LTE-A CoMP prototype: ZTE unveiled its LTE Advanced coordinated multi-point (CoMP) transmission prototype. It incorporates a number of key technologies, such as carrier aggregation, multiantenna enhancement, relay technology and multipoint transmission. CoMP technology ‘dramatically increases’ throughput on the edge. Commercial LTE-A products are due out in 2012.

■     Multiple Access Binding (MAB) solution: Dubbed the all-join, the MAB solution shows how a UE can bind multiple RATs simultaneously. ZTE demonstrated the binding of LTE and Wi-Fi on a single UE through unified authentication. It then bound multiple access technologies using integrated serving gateway (ISGW) built on the advanced service router platform. MAB is being touted as an effective way to solve data storm issues and provide high quality services by introducing synergy between their access technologies.

■     C-RAN wireless networking solution: ZTE claims that the cloud of radio access network (C-RAN) solution, first introduced by China Mobile, will lower the total cost of ownership of wireless networks by 40%. It involves the development of a new generation of wireless access networks using centralised processing, collaborative radio, real-time cloud infrastructure, clean system (green wireless access network architecture) and cloud computing.