ZTE Optimistic Over Pickup in LTE, Cloud Opportunities

The Chinese telecoms gear maker is looking to leverage an expected growth in demand driven by network upgrades and cloud computing solutions, as it looks to return to profit this year.

Chinese telecoms equipment maker ZTE is eyeing growth opportunities from network upgrades especially in China, and a rising demand for cloud computing products driven by mobile devices.

According to David An, CTO of ZTE’s Singapore-based Asia-Pacific marketing center, network infrastructure spending is expected to grow in momentum this year as carriers across the region invest more in 4G LTE capabilities to cope with demand.

For example, the company is optimistic of getting more business once China starts building out 4G networks, An said in an interview with ZDNet. China is set to issue 4G licenses this year.

The country’s largest carrier China Mobile had last month announced it would invest almost US$7 billion in 2013 in the construction of its new 4G network. The telco has been experiencing slowing growth as its proprietary third-generation network standard is not commonly used outside the country and has prevented it from supporting popular handsets like Apple’s iPhone.

The CTO pointed out Singapore also presented more business opportunities for the company to sell more backhaul transmission gear with the latest government mandate over buildings which comes into effect next month. Under revised laws, building owners must provide rent-free areas for deployment of infrastructure such as base stations―a key obstacle often cited by telcos in improving mobile coverage.

“We don’t sell wireless equipment yet in Singapore but there could be an opportunity in small cell solutions,” said An.

Cloud Push Driven by 4G LTE

A key trend which is happening is the convergence of cloud and LTE, noted the ZTE executive.

“For the past five years, operators have been focusing on introducing smartphones. This year they have been talking more about cloud and smartphones, especially now with LTE,” he said.

An said the company has been developing more cloud computing offerings especially in software-as-a-service (SaaS), on top of infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS).

Its push to tap the space includes the launch in February of its cloud radio solution―a combination of 20 of the company’s technologies for network optimization. The ZTE executive explained cloud radio helps operators solve key problems in their transition to 4G, such as unbalanced load in 2G, 3G and LTE networks, and interference between cells. Current customers include Softbank subsidiary WCP in Japan, Bharti Airtel in India, and CSL in Hong Kong.

ZTE is looking to revive its fortunes after posting the company’s first annual loss last year 2.84 billion yuan (US$456 million), reversing a net profit of 2.06 billion yuan (US$333 million) in 2011. It has also been facing challenges expanding to some western markets amid national security concerns over Chinese firms due to their alleged links to the military.

Part of its plans to do so has included a bigger push into the consumer space with handsets carrying its own branding. On Wednesday, ZTE also signed a deal with Microsoft for access to its patents for use in its various Android and Chrome OS devices such as tablets, PCs and phones.