ZTE swings to $272m Q3 loss

Dylan Bushell-Embling
telecomasia.net

 ZTE has revealed it swung to a Q3 loss of 1.7 billion yuan ($272.3 million) – its first ever quarterly loss as a public company – blaming a continued slump in the global telecom equipment market.

 
The Chinese vendor grew its operating revenue 5% to 60.7 billion yuan, as it faced delays in major international projects.
 
In its third quarter report, ZTE blamed the swing to a loss on depressed spending on telecom equipment both in China and internationally, and on a dependence on lower-margin projects in China, Asia and Europe.
 
Revenue generated from carrier networks fell 5.2% over the quarter, but terminal sales grew 15.4%  thanks to rapid growth in 3G smartphone sales. 
 
Telecom software systems and services sales grew 23.3%, due primarily to demand for video and network terminal products. 
 
In the coming quarter, ZTE has revealed plans to focus its attention on the development of mainstream products and solutions, optimise its strategies for populous nations and develop the market for government and corporate services.
 
The vendor may find it harder to win business in the US, following the publication this month of the House Intelligence Committee report recommending that operators do not procure gear from Chinese vendors.
 
ZTE subsequently revealed it has been consulting with the committee to develop a proposed solution to ease US government suspicions about the national security implications of using Chinese gear.
 

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