Year 2020 has been unique with the epidemic affecting the world economy and changing people's lives. For the communications industry, the epidemic has increased traffic and people’s demand for communication networks.
ZTE has continued to strengthen R&D and actively respond to the challenges posed by the epidemic.
In this interview, Mr. Xiao Ming, SVP from ZTE speaks with Fierce Wireless publisher Kevin Gray about the effect of the pandemic, 5G technology development trends and ZTE's future 5G strategy.
Kevin Gray: This is Kevin Gray, publisher of Fierce Wireless. And I'm here with Mr. Xiao Ming, President of Overseas at ZTE. Today, we were going to talk about a couple of different things, but I wanted to really ask Mr. Xiao Ming about what they are doing this year with everything going on with COVID, as well as just their thoughts on where 5G is heading and everything ZTE is doing around it.
Kevin Gray: So with that said, let's go ahead and get things started here. My first question to you is just going to be... COVID-19 obviously affected the operation of many companies this year... How does it affect ZTE and specifically ZTE's performance and actually kind of another part of that, if you could elaborate looking towards 2021 and beyond, what are your expectations for the future?
Xiao Ming: Well, hi, Kevin. First of all, very nice to have these chats with you. Indeed, the year of 2020, it's a challenging year for ZTE, as well. I may say for all of the world has been very, very hard, especially during the first quarter when the pandemic begins in China.
Xiao Ming: But of course we quickly adapt to the new normal, and we have gone through a comprehensive digital transformation program within the company. Thanks for that we were able to bring back our production capability and the service capability towards our global customers.
Xiao Ming: Having said that, even though that was very challenging, but ZTE, we realized telecoms industry, the industry where we are working is kind of more essential than beforehand.
Xiao Ming: During the pandemic, people had to go through the lock downs and the people as well as the businesses, are relying on telecom infrastructure to stay in touch with each other and continue to have business activities.
Xiao Ming: So we feel more than sustaining our business, but rather provides the stable services in order to maintain the working in order. And therefore we are not getting interrupted. And rather than that, we are continuing investing heavily in the R and D in order to keep our customers stay connected.
Xiao Ming: And of course, this industry, and thanks to the... I would say, no thanks. And because of the sudden growth of the demands over the internet capacity as well, more data transmitted over the telecoms network, the telecoms industry has seen a growth in terms of traffic.
Xiao Ming: That means largely the telecom industry are a lot affected severely like the other industries. As a result, as of Q3 last year, ZTE has been able to deliver carrier results.
Xiao Ming: We have achieved like many other peers, two digits growth of our global revenue. And thanks to that, we have more capability to continue investing into the new technology plans like 5G.
Xiao Ming: So that's what we see. We see best side of this pandemic, but also promising sides of this industry. So we are kind of challenged, but we're able to stay with the great performance according to the initial plan of the company.
Kevin Gray: Great. Well, it sounds like that's great that you guys are seeing increase in demand for traffic, just increase in demand overall. So how does that affect ZTE's future 5G strategy then? And what are those trends of 5G technology deployment?
Xiao Ming: Well, you're touching a very interesting topic as well, a hot topic, which is 5G. As I can see this year, 2020, is the starting year of 5G era. We are seeing globally, the operators are racing to deploy and deliver 5G services to their customers.
Xiao Ming: I think they're led by U.S., South Korea and then followed also by my home country, China and even in Europe. So everywhere around the world. Are so excited with the 5G deployment, why the 5G is so attractive and is a hot topic, is simply because this is a revolutionary technology that changed from the previous generations technology, used to only maintain the communication between people to people.
Xiao Ming: And now with 5G with the message connectivity capabilities, we're going to realize the communications in between also people to machine. Let's say, men to machine as well, machine to machine. So this is a new opportunity for the whole world.
Xiao Ming: When we really are launching the 5G services, the different industries and people's lives will all get improved and change a lot. So for ZTE, we are so proud that we are really like our slogan, "Leading the 5G Innovations." We are the major 5G players, we're the first ones adapting the essential 5G technology like Massive MIMO, years before the 5G standard being formalized.
Xiao Ming: And we are now able to provide really end-to-end 5G solutions. Everything from the 5G in the cloud, in the core, in transport and also to the video access as well as the 5G devices. So that enables ZTE to play a strong and leading role in the 5G race worldwide.
Kevin Gray: Great. I'm glad you actually touched on some of the global stuff, because that was actually going to be my next question. So since ZTE has a strategy of deploying 5G globally, then, like what would you say ZTE's role in the world is right now? And do you have any experience to share with that? Especially we'd love to hear of course your experience with 5G and stuff.
Xiao Ming: Yeah. As I mentioned, we are quite proud of our innovation in the 5G, our innovative capability within the company. So far where we stand I think, what I can update you today is we have achieved by end of September 2020, over 55 5G commercial contracts globally. And we are collaborating with over 90 operators along the world in 5G.
Xiao Ming: And talking about the use cases because without the use cases, 5G, you can do nothing. We're now also focusing on that collaborating with almost 500 industrial partners. Developed many, many use cases. I think we are quite ahead of our competitors.
Xiao Ming: And according to the third party like Dell'Oro's recent report, ZTE has been ranked world's top two, in terms of RAN shipments. It's roughly over the last two quarters, we have achieved and like 5G RAN share of 30%. And China is the major contribution market.
Xiao Ming: What is going on in China right now is massive. According to the official data as of Q3 of last year, these three operators together in China have already implemented roll outs over 718,000 factory sites. That's roughly 70% of the world run.
Xiao Ming: ZTE acquires roughly around a third of the Chinese market 5G markets. That means globally, we are able to achieve also a significant position. And as the 5G continues being implemented worldwide, we'll notice that the 5G SA becoming... Which is the ultimate goal for the 5G deployments... Becoming a new trend, also led by the Chinese operators.
Xiao Ming: What I can share with you is the Chinese operators are really pushing heavily for the standalone scenario. Every 5G devices, which can be granted the access to the Chinese 5G networks, you need to support the dual mode which is NSA and SA both capable devices.
Xiao Ming: So those are the efforts they are making in order to push for the real 5G to be delivered. And we are so proud we are the major contributor in China. As well, we are the major contributor as well, especially in the European markets. As well in the South East and Asian markets.
Kevin Gray: Great. So I heard you talk about some things with the RAN there. Some things with the core. It sounds like ZTE has some innovative things happening around 5G in general, right? But if you could, I'd love to hear a little more in detail about that, maybe. What are some of these new solutions, as well as what you think their advantages are?
Xiao Ming: Yeah, I think there is no other miracle but you have to force and focus on R and D investments. This is the key for innovations. And for ZTE, over the last three quarters we've increased our R and D spending. I think we have compared to last year, we have also around 15% growth of the R and D spending.
Xiao Ming: And that's a heavy investment. We have a lot of breakthroughs in 5G technology. I give you a few example why we feel that we are really leading the way for the 5G innovations.
Xiao Ming: The first one is, we are focusing really on helping our customers globally to accelerate and simplify the 5G deployment. The first key technology I would like to mention is the SSB 1+X solution. That means the synchronization signal and the PBCH block. These one sounds a little bit complicated, but that technology will increase the coverage of the tall buildings, up to 30%. It reduces the 5G coverage efforts needed significantly.
Xiao Ming: And the second feature is I would like to mention is called a super DSS. We are the only vendor pushing forward for this one. The others are mainly chasing for DSS. That's only share one technology with 5G. 4G and 5G.
Xiao Ming: ZTE has managed to develop the super DSS, meaning you are able to share all the previous generation technologies from GSM, UMTS, LTE to the NB-loT to the NR, the new radio, which is 5G.
Xiao Ming: So you have full flexibility to share and utilize your frequency or spectrum resources you have. So as long as you are continue expanding your previous generation network coverage or capacity, we allow them to implement the hardware and software, which is ready for them to immediately just switch on in a later stage of the function. So there's a full flexibility we are providing them.
Xiao Ming: The third one, I like to mention, we call FAST. F-A-S-T. We call it FDD Assists Super TDD. These results, they issue for the spectrum efficiency, with that FAST technology, the up link peak rates' going to be increased by 32%. That's a really major boost.
Xiao Ming: And also, more than that is the cell coverage. We'll be able to expand for 31% higher. But that's something I think we'll be reducing a lot of the number of sites needed in order to achieve the same coverage, same speed.
Xiao Ming: But with these innovation capabilities, we are able to help our customers worldwide to reduce their efforts to deploy a very comprehensive or complete 5G coverage or level.
Xiao Ming: In the other segments, because 5G, what I would say is a business to B. I mean, changer. This will be able to change the way a lot of operators, not only focusing on the consumer business, but also chasing for message, big businesses market.
Xiao Ming: There are a lot of use cases can be deployed, thanks to the 5G. ZTE is also leading the way in that segment. I give you just one example. There's an Air to the Ground, which is ATG. ZTE has been a pioneer. We're now also adapting the 5G to the ATG technology.
Xiao Ming: That means in the near future, you will be able to rely on that technology, sitting in the plane in the air. You will be able to surf and enjoy the internet with gigabits, connection speed, wherever you are flying. So that's something I think we'll be able to change our way of business life or travel life significantly.
Xiao Ming: The last part I would like to mention which we are so proud is the power consumption becomes an issue when you deploy the 5G. What we have been doing so hard is to reduce the power consumption in order to deliver the 5G services a greener technology.
Xiao Ming: We have developed a feature called Power Pilot. With this innovation, we're able to help the operators who are operating on our 5G technology, save up to 10% of the power consumption, compared to the competitors technology.
Xiao Ming: I give you one. Maybe tell you by numbers. So far, we have roughly around 600,000 radio sites running around the world. With that technology, Power Pilot, we will be able to help our customers save at least one billion U.S. dollars for the electricity bill a year. But that's something significant and also brings and delivers the 5G technology as a much greener technology than the previous generations.
Kevin Gray: Great. So we have time for one more question here. I think you actually... You covered a great example here, but I just want to dive into it a little bit more, an example. So there's just so much momentum right now with applications for 5G and industry and enterprise right now, right?
Kevin Gray: You talked about the one in the air. What other industry applications does ZTE have? And can you describe maybe another case where many people can benefit from 5G applications?
Xiao Ming: Right. As I have mentioned, we are all excited about the 5G future. I would say 5G future will be... You can only reflect that with the different 5G use cases. This is the most essential part of 5G service.
Xiao Ming: We're so proud of our progress. So far, we are now collaborating worldwide with over 500 industry partners. I think we are focusing on some key industries like manufacturing, education, healthcare, media, transportation, energy, and so on.
Xiao Ming: I'm going to just give you a few examples, which we feel could shaping the future of our lives. The first one I think who could benefit from the 5G is the 5G powered intelligence manufacturing.
Xiao Ming: We've already realized that in our own manufacturing plants. We use the 5G technology in our factories and largely automated the manufacturing processes. Now we call it, we are making 5G with 5G. So that's a good example. I think the future manufacturing automation will be highly benefited out of the 5G deployments.
Xiao Ming: The second one is in the world, nowadays people are shopping online and the logistics, especially the large ports, get congested. It's becoming a lot of challenge. And what we're doing now is like in Tianjin. That port is one of the largest one in China, and also top ones around the world.
Xiao Ming: They're handling millions of containers every year. So we're collaborating with the Tainjin ports. We have deployed a 5G smart port. That one enables for them to increase heavily the efficiency, handling those containers and maintaining orders and ensuring faster delivery of the goods in the major ports like that.
Xiao Ming: Similar thing, what we're doing in Europe is also in Belgium. Where we are doing the similar thing, which we see is significantly improvement of the port handling efficiencies.
Xiao Ming: The other one I would also mention, probably will be in the future. We talk a lot about 5G improving or realizing the VR or AR experience. One of the interesting use case could be the 5G plus hologram technology.
Xiao Ming: We realized that in 2019's 5G World Summit in the city of Valencia in Spain. So people were able to talk to relying on the hologram technology remotely with some one who is not there on stage. And the audience could not recognize at all because of the latency provided by the 5G technology, they are so low, and the bandwidths are so great.
Xiao Ming: Then the two people actually talking to each other virtually appears to like a two persons talking to each other. But this is something you can not realize it before. Now with 5G, you will be able to do so. And that will be the new future.
Xiao Ming: And also the other last but not least case I would like to mention is the healthcare use cases relying on 5G. During this pandemic, we are collaborating with many hospitals, help them to realize that the 5G remote operations diagnosis as well as supporting the patients be treated virtually remotely and saving a lot of lives.
Xiao Ming: So those are the things I think we'll be able to largely benefit the people around the world as well, help those industries find a new way for the future models. And this will be for sure, what are we going to see with the 5G era coming into force, coming into reality. We will be all seeing significant improvements in our daily life. We are quite proud we are part of that great journey and we are the one of the key enabler for the global 5G deployments.
Kevin Gray: Great. Well, remote surgery, holograms, smart manufacturing. We covered quite a bit there. Mr. Xiao Ming, thank you so much for joining us today. That's all the time we have for today, but we hope to have you back on soon.
Xiao Ming: My pleasure. I think please keep, well during this pandemic. I believe we will have a exciting summer, hopefully after we have these holiday seasons.
Kevin Gray: Right. Thank you. You as well. All right, take care.
Xiao Ming: Thank you. Take care.