On July 12th, US Commerce announced that it will sign a escrow agreement with ZTE. After ZTE pays a deposit of US$400 million, it will cancel the previously ban on sales between US suppliers and ZTE. This means that After more than three months of twists and turns, ZTE regained its vitality and ZTE was resurrected. However, this is not an ending, an end point. On the contrary, this is a new beginning, a new starting point. Moreover, the present It seems that this is not a good starting point.
ZTE will soon face a series of new problems, and it will withstand the test of all kinds of difficulties and obstacles. The next road, how should ZTE go?
The first question that is faced first is, is the market still in the past?
At the end of June, it was reported that due to the delay in the lifting of the ban, the largest mobile operator in Italy, Wind Tre SpA, officially terminated the 5G supply contract with ZTE, with a contract value of 600 million euros. It is understood that this project is ZTE devoted a lot of time, money and energy, and struggled to defeat the projects won by Huawei, Ericsson and other mainstream manufacturers. It was originally planned to adopt ZTE’s completely independent Pre-5G solution to create a new European model base. It is regarded as a milestone project of ZTE's 5G process. This time, the cooked duck flies, which is a heavy blow to ZTE, and more seriously, the follow-up may also have to pay a huge amount of liquidated damages.
This is just one of the projects that have been lost. It is understood that many projects in various countries around the world have different levels of negative problems. In a recent report on Huawei, Xu Zhijun, chairman of Huawei’s rotating company, hinted that ZTE’s customers have taken the initiative to cooperate with Huawei. Contacted. Even if I can finally keep the project, but it has been delayed for more than three months, the project compensation involved is estimated to be an astronomical number.
After this battle, ZTE’s injuries were not only on the project, but also on the corporate brand. In the short term, the road to ZTE’s internationalization was basically cut off and it would enter the shock at any time. 'The state of the enterprise, who dares to cooperate with it for a long time.
The project of Wind lost by ZTE finally fell into the hands of Ericsson, the old rival of Chinese manufacturers. It is a disadvantageous situation for ZTE. The domestic manufacturers represented by Huawei in recent years have already adopted Ericsson. The momentum is gone, this time let the opponent eat the meat, and it will be more difficult to compete in the future.
The second question, is the former employee still there?
From the current news, ZTE has experienced a long period of 'shutdown', but has not carried out large-scale layoffs, and there are sporadic resignations, but it does not affect the fundamentals of ZTE. It is understood that ZTE had a Ph.D. There are 416 employees, 22903 master's degree holders, and 29,451 undergraduate employees. These are highly educated and highly educated people, and they are a very capable team, as the various open letters of ZTE executives say. As long as these employees are still there, ZTE is in '.
But are these people really still there? In fact, although they are still there, their sense of belonging, loyalty and recognition of the company may have changed radically. A company that is frequently caught in a 'stormy' state A company that even the company's executives will be dumped in the whole pot, how much security can the employees have below? There is no sense of security, how much thought and energy can be put into the work? How many people have already done it in their hearts? 4. If you get the compensation, you have to find another job.
If ZTE can't open the knot of employees in a short time, re-energize everyone's work passion and sense of belonging to ZTE, even if the market returns, I don't think ZTE can return to the previous development track.
The third question, can ZTE still stand on the 5G stage?
Recently, many analysis articles have pointed out that ZTE has great influence on 5G, and holds many 5G patents. It is likely to realize the return of the king on 5G. Is this correct?
It is true that ZTE has strength in 5G. Before the 'rejection incident' occurred, ZTE was quite conspicuous in the promotion of 5G. For example, in 2017, ZTE cooperated with more than 20 top operators around the world on 5G. - Opened China's first 5G pre-commercial base station with China Mobile, opened the first 5G field test with Japan Softbank, and built the first 5G pre-commercial network for Europe. In January this year, ZTE announced that it will be launched in the US at the end of 2018 or early 2019. A 5G-enabled smartphone became the first company to launch a 5G smartphone in the US; in February, ZTE announced its 'Technology, Commercial, Scale Benefit' three leading 5G strategies at the World Mobile Congress. The team of more than 4,500 technical experts has fully invested in the development of 5G standards, product development and commercial verification. In the next few years, 46.7 billion yuan will be invested in 5G product development. In April, ZTE successfully opened the 3GPP R15-based standard in Guangzhou. A telephone, officially opened the end-to-end 5G commercial system scale field site, further accelerated the 5G commercial process. Up to now, according to ZTE's open letter, ZTE's 5G network architecture design, high-frequency communication ZTE and IOT have deep accumulation. In terms of 5G network chips, ZTE has the ability to design and develop 7nm process technology. At the same time, ZTE also holds the industry's largest capacity 5G vector multi-processor high-performance baseband chip. Provides a complete 5G end-to-end solution, including wireless, wired, core network, cloud computing, services, terminals and many other capabilities.
The above is the strength of ZTE on 5G, and it is the biggest capital for ZTE to re-start. However, in the face of giants such as Huawei, Ericsson, Nokia, Qualcomm, etc., ZTE and other such strengths are not so prominent. The market follows the winners. The law, the first can eat meat, the second can also drink bone soup, the third can only stand on the side.
For example, it is said that ZTE has experienced great glory in the past, but if it is calculated from the financial point of view, ZTE’s past is far from brilliant. ZTE’s pre-tax profit for the past 10 years totaled 26.22 billion yuan. The net investment income of equity was 8.88 billion yuan. The net amount of various tax rebates and government subsidy income after deducting various non-operating expenses was 18.087 billion. These two add up to more than 26.2 billion yuan, which means that ZTE’s owners in the past 10 years The business is loss-making, and all of its profits are derived from tax rebates, government subsidies and investment reductions.
After the 'rejection of the incident', the market value of ZTE will definitely be greatly reduced. At the same time, the government's tax rebates, subsidies and other support will be as strong as before. This is doubtful. Once the capital chain has problems, what will ZTE take? Going to 5G? Going back to the first question, how many international operators are still willing to trust ZTE, and are willing to hand over the heavy responsibility of 5G construction to ZTE?
Of course, ZTE is a domestic enterprise. To some extent, it represents the image of Chinese manufacturing. No one wants to watch it become a Chinese company. We hope that ZTE can recognize the current situation and make the right choice. Going out of a new road.