ZTE emerged as a big winner in the last two massive 5G tenders announced by China’s three major operators, with the vendor walking away with contracts worth a staggering CNY76.5 billion ($10.8 billion), a figure surpassing its entire network revenue in 2019.
The company’s network group turnover [1] last year totalled CNY66.6 billion, with total company operating revenue at CNY90.7 billion.
Last Friday (24 April), ZTE and Huawei each won 35.9 per cent shares of a China Unicom and China Telecom tender for their joint standalone 5G network [2] contract valued at CNY183.5 billion. For China Mobile’s second phase 5G tender [3], valued at CNY37.1 billion, Huawei was awarded a 53.7 per cent contract, while ZTE took a 28.7 per cent share.
Huawei’s two contracts worth CNY87.2 billion represent 29.4 per cent of its Carrier Business Group’s revenue [4] of CNY297 billion in 2019. The company’s total revenue last year was CNY859 billion.
While ZTE has seen its share of domestic operator contracts rise sharply, Nokia was frozen out of both tenders.
Capex surge
Interestingly, the value of the joint China Telecom and China Unicom 5G tender (about $26 billion) is actually more than their originally announced combined capex total for 2020: Telecom earmarked CNY85 billion [5] in its 2019 earnings report while Unicom allocated CNY70 billion.
In late-March, after deployments were delayed [6] at the peak of the virus outbreak, Chinese media reported operators started to accelerate the rollouts [7] following pressure from the government to ensure there were no further setbacks.
Duncan Clark, founder and head of BDA China, a consultancy, told Mobile World Live there has been a surge to roll out before year-end as instructed by authorities, with “the symbolism of China moving ahead of other countries with 5G an obvious political objective”.
[1] https://www.mobileworldlive.com/featured-content/top-three/zte-profit-rebounds-on-strong-network-growth/
[2] https://www.mobileworldlive.com/featured-content/home-banner/nokia-loses-out-on-china-unicom-telecom-5g-sa-deal/
[3] https://www.mobileworldlive.com/featured-content/top-three/nokia-misses-massive-china-mobile-5g-tender/
[4] https://www.mobileworldlive.com/featured-content/home-banner/huawei-sees-2020-as-pivotal-year/
[5] https://www.mobileworldlive.com/asia/asia-analysis/china-invests-47-3b-to-spur-mobile-rebound/
[6] https://www.mobileworldlive.com/asia/asia-news/china-5g-rollouts-fall-victim-to-virus/
[7] https://www.mobileworldlive.com/featured-content/home-banner/china-fast-tracks-5g-aims-to-lead-sa-push/
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