Higher sales of carriers’ networks, handsets, video solutions,network terminals and telecommunications services support strong earnings growth

23 April 2015, Shenzhen, China – ZTE Corporation (0763.HK / 000063.SZ), a major international provider of telecommunications, enterprise and consumer technology solutions for the Mobile Internet, today reported first-quarter net profit rose 41.9%, as the company’s new M-ICT strategy generated new growth avenues.

Net profit attributable to shareholders of the listed company increased to RMB 883 million (US$142 million) in the first three months, according to the results announcement posted by ZTE Today. Basic earnings per share climbed to RMB 0.24, while revenue rose 10.2% to RMB 21 billion.

Operating revenue from telecommunications software systems, services and other products increased by 23.4% in the first quarter, as ZTE recorded strong growth from video and network terminal products, in addition to services. Under the company’s M-ICT strategy, ZTE is focusing on new innovative products to capture the growth in demand for solutions in cloud computing, big Data, Smart City and high-performance routers, helping carriers and enterprise customers capitalize on opportunities in the era of mobile broadband and Internet of Things.

Revenue from Carriers’ Networks increased by 8.9%, as compared to the same period last year, driven by growth in sales of products such as wireless communication systems, wireline switch and access systems, routers and router switches. Operating revenue from handset terminals increased by 7%, as compared to the same period last year, reflecting mainly higher sales of 4G handset terminals.

The global telecommunications industry is continuing to benefit from the large-scale deployment, capacity expansion, performance optimisation and in-depth coverage of 4G networks, as well as the construction of ancillary equipment and facilities for these networks. The issue of LTE FDD licenses in China has driven further increase in investments in overall network equipment, while the implementation of the broadband China strategy coupled with increasing demand for the upgrade of existing wireline broadband networks has ushered in a phase of relatively rapid development for wireline broadband networks.

Looking ahead, ZTE will continue to focus on its three main operations of Carrier Networks, Enterprise Business and Mobile Devices. In Carriers’ Networks, ZTE will be committed to developing solutions for smarter networks to support carriers in their transformation into information-based operations. In Enterprise Business, ZTE will actively drive the transformation of various industries towards “Industry 4.0” or “Industrial Internet” with enhancement of corporate customers’ operational efficiency. In the consumers’ market, ZTE will actively investigate smart device technologies and new technologies in human-machine interaction, while efforts will be made to develop integrated innovative home terminals.