ZTE launches drive for innovative tech solutions

ZTE Corp, the mainland's second-largest telecommunications equipment manufacturer, has established a 100 million yuan (HK$120.74 million) venture capital fund that will invest in innovative projects proposed by its employees.

Chairman Hou Weigui, chief architect of the so-called 'Innovative Fund', yesterday said the endowment is expected to encourage ZTE staff to develop what he described as 'ground-breaking new telecommunications solutions'.

'Mobilisation of our employees as creators of ideas for investment by the fund is part of our strategy to create bold new concepts and products in the telecommunications industry,' Hou said.

ZTE has about 80,000 employees worldwide, including 30,000 research and development personnel.

The Shenzhen-based company led the mainland in the number of international patent applications last year, according to the World Intellectual Property Organisation. It achieved a global No 2 ranking with 1,863 patent applications last year, up from its No 23 position in 2009 with 1,346 applications.

The Innovative Fund announcement came a day after ZTE revealed plans to set up 10 international 'innovation centres' in Europe and South America with several major telecommunications network operators. It will also form similar centres on the mainland through partnerships with China Mobile, China Unicom and China Telecom.

The collaborative research to be undertaken by ZTE in those laboratories is expected to help its partner carriers adopt new products and strategies that would be relevant to their operations.

'Providers like ZTE must deeply understand and become seamlessly involved in the business operations and requirements of customers at a faster pace,' executive vice-president Xie Daxiong said.

ZTE is currently embroiled in an intellectual property rights dispute with rival Huawei Technologies, the mainland's biggest telecommunications equipment maker. In April, ZTE filed a lawsuit on the mainland that claims Huawei violated its patents on 4G mobile technologies based on a standard called Long-Term Evolution (LTE), and should pay compensation.

That action was an apparent response to the lawsuits filed against it by privately-held Huawei earlier that month in Germany, France and Hungary. Huawei alleged that ZTE infringed a series of patents related to its data card and LTE-standard 4G mobile technologies.

Shares of ZTE were down 1.95 per cent to close at HK$25.10 yesterday.