China Conference

China will be at front of global pack for launch of 5G networks by 2020, says telecoms giant ZTE

Company plans to debut its ‘pre-5G’ technology in China next year

PUBLISHED : Monday, 02 November, 2015, 6:36pm
UPDATED : Monday, 02 November, 2015, 6:40pm

Chinese technology enterprises will be among the first in the world to launch 5G networks by 2020, ZTE Corp. said on Monday.

The Chinese telecoms giant plans to commercialise its “pre-5G” technology in mainland China next year.

“When 4G networks were introduced to the market, China still saw about a three-or- four- year lag behind Western countries,” Alex Wang, vice president of ZTE’s CTO Group, said at the South China Morning Post’s China Conference in Hong Kong.

READ MORE: China’s ZTE to partner with SoftBank to bring ‘pre-5G’ technology to Japan

“But when it comes to the 5G era, the Chinese government has already announced it will run 5G [services] by 2020 [making it] as fast as developed countries like Japan, the United States and South Korea.”

Wang said China’s internet and mobile phone users will be able to enjoy speeds between 10 and 100 times faster than now within five years, as the government keeps pushing innovation and technological development.

ZTE will spend around US$220 million globally on 5G and other mobile communication technologies between 2015 and 2018, the company said.

As the world’s fastest-growing provider of 4G networks solutions, ZTE has touted its “pre-5G” technology, an intermediate step between 4G and 5G, as applying some advanced technology to existing 4G networks.

READ MORE: China’s ZTE jumping into US$16 billion ‘smart city’ business after signing up 100 local governments

Wang said the company will serve the Chinese and Hong Kong markets first before taking the faster networks overseas.

ZTE is known to be investing heavily in 5G to play an industry leading role. In the next couple of years, it will use its “pre-5G” technology to offer faster speeds on 4G networks using the current 4G infrastructure.

Meanwhile, Huawei, China’s biggest telecoms network equipment maker, is also set to spend US$600 million on researching and developing 5G technology, it said.

Premier Li Keqiang has expressed his frustration over China’s slow internet speeds due to the risk of these potentially hurting economic growth and industrial restructuring in the country.

Li has made his “internet first” campaign a centrepiece of his economic policy this year.

Wang said ZTE is also eager to recruit talented staff from around the world who can work in innovative areas like cloud computing, big data and new energy as it has already set up 19 research and development centres globally.

Keen to expand to foreign shores, ZTE already ranks as the fourth-largest smartphone vendor in the US with a nearly 8 per cent market share, according to consultancy firm Strategy Analytics. It follows Apple, Samsung and LG in that market.

The company reported a net profit of 988.6 million yuan (US$156 million) in the quarter to September, up from 703.3 million yuan in the corresponding period of 2014. It cited strong global sales to telecommunications network operators as a chief factor.

Revenue grew 7 per cent to 22.6 billion yuan over the same period.