On the evening of October 21, ZTE released its third-quarter report.

Amidst the overall reduction in capital expenditures by operators, some aspects of this telecommunications giant's performance remain noteworthy.

[Stabilizing the Present, Laying Out the Future]

In 2023, the combined capital expenditures of China Telecom, China Unicom, and China Mobile totaled 353 billion yuan. By 2024, this budget has decreased to 334 billion yuan.

However, even so, ZTE has maintained an overall stable operating situation.

The financial report shows that the company achieved operating revenue of 90.04 billion yuan in the first three quarters of this year, up 0.7% year-on-year; net profit attributable to shareholders was 7.91 billion yuan, up 0.8% year-on-year.

The ability to maintain resilience in development hinges critically on hard power.

ZTE has always been renowned for its emphasis on research and development. In the first three quarters of this year, the company continued to invest 18.64 billion yuan in R&D, accounting for 20.7% of its revenue. This figure ranks among the top in the industry and even the entire A-share market. All these investments have ultimately been efficiently converted into chips for the company to compete in the market.

According to the latest data from telecom consulting agencies, ZTE ranks second globally in cumulative shipments of 5G base stations and 5G core networks, second globally in market share of fixed network products, and has received industry leader ratings for RAN products, 5G core networks, and 5G optical transmission. In addition, the company's optical access products have received international recognition, winning three awards at the international Network X Summit; its data management capabilities have obtained the highest level of certification (DCMM Level 5) in the National Data Management Capability Maturity Assessment, among others.

Looking ahead, as the industry development ecosystem continues to evolve, ZTE is also embracing new development opportunities.

Unlike previous 2G/3G/4G eras, since the 5G era, driven by digitization, informatization, and intelligence, the demand structure of the entire telecommunications industry has undergone significant changes.

Taking ZTE as an example, it focuses on the two major tracks of "connectivity" and "computing power" to continuously open up new development spaces. In the field of "connectivity," the company collaborates with operators to build an "air-space-ground integrated" 5G-Advanced all-dimensional network centered around the commercial deployment of 5G-A, promoting the development of satellite internet. In the field of "computing power," ZTE offers customers full-stack, full-scenario intelligent computing products, including IDC, AI servers, high-performance storage, RoCE switches, intelligent computing platforms, large models, and applications, comprehensively covering AI scenarios for terminals, edges, and data centers.

As these new businesses are still in their early stages of development, they have not yet fully scaled up. However, as the underlying technologies continue to mature, the industrial process is moving forward rapidly.

[Enhancing Underlying Innovations to Empower Diverse Industries]

On June 18th of this year, the 3GPP RAN #104 meeting officially announced the freeze of the R18 technical standard, marking the official start of the 5G-Advanced commercial era. In this wave of development, ZTE is undoubtedly at the forefront.

In the low-altitude economy, the company has partnered with various entities to validate the applications of 5G-Advanced integrated sensing and communication in various scenarios such as logistics distribution and low-altitude safety in over 80 pilot sites across 25 provinces and cities, including Beijing, Nanjing, and Shenzhen. In the ground segment, it has pioneered ultra-low latency XR gaming, enabling full-HD live streaming throughout CCTV's Spring Festival Gala and implementing the industry's first pilot application of an integrated sensing, communication, and computing novel vehicle networking solution. In the low-altitude segment, it has launched the industry's first large-angle AAU, expanding the vertical angle to 65° to achieve a sensing range exceeding 1.5 km and has achieved commercial deployments of integrated sensing and communication technologies in various regions nationwide.

Apart from 5G-Advanced, ZTE has also achieved phased results in its AI layout.

In terms of intelligent computing infrastructure, the company has introduced an "one machine, multiple chips" open-architecture AI server compatible with mainstream GPUs and boasts network-enhanced computing capabilities, launching a 2x200G network card based on self-developed chips. It has also promoted the OLink high-speed bus interconnection standard, developed self-developed high-capacity switching chips, and conducted research in forward-looking technological directions such as core technologies for super-card clustering, native computing power, long-distance interconnection in intelligent computing centers, and intelligent distribution of inference tasks.

In terms of large models and applications, ZTE has developed its own Nebula series of large models, with the development of large models effectively driving improvements in R&D efficiency. The communication large model has been deployed in specific scenarios such as anti-fraud, critical protection, new calls, and experience assurance, and is actively expanding into industrial, automotive, steel, water conservancy, and urban lifeline models and applications.

As is well known, artificial intelligence has substantially entered the stage of industrialization, and it is a general trend for traditional industries to widely embrace AI. In this context, ZTE's investments in intelligent computing are likely to enter a phased monetization period.

In fact, ZTE's layout in the AI field is not limited to intelligent computing but also includes intelligent terminals, which are equally noteworthy.

Take AI phones as an example.

According to IDC, global shipments of generative AI phones are expected to reach 230 million units in 2024, with a penetration rate of approximately 19%, and will further increase by 73% to nearly 400 million units by 2025. Following this trend, ZTE has released the comprehensively upgraded AI all-round image flagship nubia Z60 Ultra Lead and AI+satellite phone nubia Z60S Pro, as well as the affordable 5G phone ZTE Blade V40.

Another example is intelligent connected vehicles.

ZTE's automotive electronics business has deepened its cooperation with automakers, jointly releasing the self-developed automotive-grade high-performance central computing unit SOC chip "Hanyu" M1. In addition, the company has signed a strategic cooperation agreement with China FAW Group to develop the multi-domain integrated chip "Hongqi No. 1" and collaborated with SAIC Motor to launch a million-level vehicle-cloud communication product, achieving the first mass production of a domestically produced automotive-grade dual-core 4G communication module and accelerating the overseas expansion of domestically produced intelligent connected vehicles.

Since the beginning of this year, the macroeconomy has shown signs of pressure, and various industries have faced certain growth pressures. Relying on technology innovation to drive development, ZTE empowers diverse industries in response to the demands of the new productivity era, demonstrating resilience in the present and holding promise for the future.

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