Chinese vendor ZTE posted a CNY860 million ($128.2 million) profit for the first quarter of the year, compared with a loss of CNY5.4 billion in Q1 2018.
Operating revenue of CNY22.2 billion in Q1 2019 was down 19.3% from CNY27.5 billion in the same quarter the previous year.
For the first half of the year, ZTE said it expects to see a profit in the CNY1.2 billion to CNY1.8 billion range.
For full 2018, the vendor posted a net loss of CNY6.98 billion, which was within the estimated range disclosed in the preliminary announcement of 2018 annual results. ZTE said that the 2018 results were mainly attributable to the $1 billion penalty imposed by the U.S. government.
In March 2018, the Department of Commerce’s Bureau of Industry and Security (BIS) imposed a seven-year export ban to ZTE after it found that the vendor had violated sanctions the U.S. had imposed on Iran and North Korea.
In early May, ZTE ceased its major operating activities due to the ban, which did not allow U.S. firms to ship key components, including chips, to ZTE.
In June, the Trump administration reached a deal with China to ease the penalties, allowing ZTE to resume business.
“During the first quarter, ZTE insisted on the innovation drive, intensifying the R&D investment in the 5G core areas. In the Wireless Networks, ZTE has entered into 5G cooperation with 40 global operators, and takes the lead in the commercial practices of Massive MIMO, one of the 5G key technologies,” the vendor said in a statement.
“In the fields of 5G industry applications, ZTE is devoted to collaborating with major operators and partners to conduct ‘5G+’ research and exploration, demo construction, as well as commercial incubation in the areas of intelligent manufacturing, new media, smart grids, intelligent ports, intelligent airports, environment protection, tourism and healthcare, thereby facilitating the digital transformation of vertical industries in the 5G era.”
ZTE highlighted a recent strategic cooperation agreement with Sany to jointly explore the in-depth integration of 5G and the industry. Also, ZTE collaborated with Hunan Branch of China Telecom to build a smart factory, and Tianjin Branch of China Unicom to build what it claims to be the world’s first 5G&MEC intelligent port.
“Moving forward, the company will continuously strengthen its investment in major businesses and key markets, constantly improving the competencies of its major products and intensifying the cooperation with third parties in the industry, so as to promote the positive development of the industry chain,” ZTE said.
In related news, ZTE has signed an agreement with Indonesian carrier Smartfren for 4G network expansion and 5G network trials.
The agreement was signed by Merza Fachys, President Director of Smartfren, Gandi Sulistyanto, Chairman of Smartfren, Liang Weiqi, President Director of ZTE Indonesia, and Mei Zhonghua, Senior Vice President of ZTE at Indonesia – China Business Forum.
“The agreement this time will definitely bring the partnerships between ZTE and Smartfren to a new level,” said Mei Zhonghua, senior vice president at ZTE. “We are pleased to be chosen for the development of Indonesia’s telecommunications infrastructure, so as to improve Indonesia’s national broadband network quality.”
Smartfren’s president Merza Fachys said: “We are pleased to collaborate with ZTE for developing 5G technology at Smartfren. We’re preparing to conduct 5G trials very soon in Indonesia. Collaboration with ZTE is not just for the development of 5G, ZTE is still working with Smartfren to expand 4G networks in Indonesia.”
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