Directly attacking the 2021 ZTE Global Analyst Conference: Focus on the value market ICT global accumulation Win-win digital intelligence era future

Reading Chuang / Shenzhen Business Daily reporter Chen Shu

On October 25, ZTE's 2021 Global Analyst Conference was held in Shenzhen. Xie Junshi, executive vice president and chief operating officer of ZTE, Ni Fei, senior vice president and president of the terminal business unit, and Cui Li, chief development officer, participated in the Q&A Q&A session online, and responded to the concerns of global analysts on hot topics such as global market expansion, digital transformation in the post-epidemic era, terminal business layout, tight production capacity in the semiconductor industry, 6G evolution, and double carbon.

Overseas adhere to the focus on the value market to consolidate the core competitiveness of 5G

From the perspective of the global 5G development trend, in the next stage, ZTE will focus on emerging countries in the Asia-Pacific region, branches of the world's leading operators, and 5G development in strategic markets that have entered Europe. ZTE hopes to enhance its overall 5G competitiveness overseas through the following four aspects:

First, technology is leading. Adhering to technological innovation is a treasure of ZTE's development in the past 36 years. From the perspective of 5G technology, on the one hand, it is necessary to adhere to the underlying technology, including the continuous expansion of chips, algorithms, architectures, etc., so that the performance of the product is better, the power consumption is lower, and the volume is smaller. At the same time, we must continue to increase the research and development of 5G backward technology to maximize the value of 5G. In terms of 6G, ZTE has started research and development, and strives to apply some key technologies of 6G on the 5G network in advance to continue to maintain a leading position in technology.

Second, business leads. China has built 1 million base stations so far, accounting for 70% of the world's total, of which ZTE accounts for more than 30%. Communication is an engineering discipline, and the external environment it faces is relatively complex. ZTE has more than 300,000 base stations in China, accumulating rich commercial experience for overseas 5G expansion. How to improve the user experience in different environments is very important. In addition, the company has carried out a large number of 5G industry application practices in China, such as mining, metallurgy, medical treatment, transportation and other fields, which are also very much needed overseas.

Third, cybersecurity. First of all, ZTE actively participates in the proposals of various international standards organizations on cybersecurity standards. Secondly, the company has also passed the certification of cybersecurity by several international standard organizations. Finally, the company has set up cybersecurity labs in many countries in Europe. Through these initiatives, we hope to reassure partners and end users about using ZTE's 5G network solutions.

Fourth, efficient delivery overseas. ZTE's slogan is to leave simplicity to customers, especially in the field, the company hopes to be able to use ZTE equipment through minimalist interaction, intelligent maintenance, so that operators using ZTE equipment can feel very worry-free.

ICT global accumulation organic integration win-win digital intelligence era future

ZTE has been deeply involved in the ICT field for 36 years and has accumulated end-to-end global technology and innovation. In addition to wireless access, wired access, core network, all-optical bearer network, and computing infrastructure, in recent years, there have also been many accumulations in cloud network integration, edge expansion, and industry application solutions. This allows ZTE to better combine the needs and characteristics of different customers to tailor-made.

In the customization process, ZTE found that the accumulation and innovation in the ICT field will help ZTE to effectively integrate its underlying core capabilities, technological innovation capabilities, delivery deployment, and overall integration, so as to provide customers with the simplest, most economical, convenient and integrated digital service solutions.

Take, for example, Austrian Hutchison. ZTE helped Austria's Hutchison build a 5G end-to-end SA network last year. On top of this network, ZTE provides 5G wireless access, core network, industry application platform and so on. In the process, in addition to ensuring the quality of the entire network and making customers the fastest evaluation speed and the best experience network in the third-party evaluation, the company also helps customers to expand and innovate in the entire industry market.

For example, ZTE uses 5G factories, 5G smart parks, 5G smart beekeeping, 5G slice malls, etc., to make it easier to carry out business development, and this end-to-end all-field cooperation enables companies to help customers better optimize the global optimization and soft and hard collaboration.

Through the combination of a variety of products and solutions, ZTE brings customers more than just a network, or a part of the network, but an ecological platform that can continue to generate value, which will help customers take the lead in the future digital age.

Accelerate your own digital transformation and build a highly resilient business organization

ZTE is building a resilient operational organization through digitalization, and ZTE's digital transformation includes three points:

First, the job of digital transformation is a long run, not a sprint. Long-distance running needs to be subtle to play its role.

Second, despite the inconveniences caused by the epidemic, there is a consensus on the importance of digitalization in business operations, and the epidemic is an accelerator for the digital transformation of enterprises.

Third, digitalization is not only about building a resilient operational organization, or improving operational efficiency, but also about process changes and structural restructuring. For every enterprise, it is a long way to go, after all, it is to revolutionize its own life.

ZTE's concept of digital transformation has two main points from an operational point of view:

The first is the dataization of operations, that is, the dataization of management; the second is the value of data. All of our operations management, first of all, must turn it into data. When we first did management, there were many qualitative things, but there were few quantitative things. As we become digital, how to extract effective data from massive amounts of data becomes key. Second, we want to value data, so our digitalization is defined into several stages:

The first stage is to go from offline to online, turning management data into online data, and then from online to online to intelligent online. How to realize the value of the entire data, from the earliest "people looking for things" to "things looking for people", can fully improve the efficiency of the entire work, is our definition of several stages of digital transformation.

For the goal of digital transformation, ZTE has three important goals, the first goal is to build a highly resilient operational organization through digitalization. In research and development, it is highly compatible and replaceable, and multi-site R&D collaboration; and the supply chain is a flexible supply chain of multiple factories and multiple legal persons. The second goal is to improve our turnover efficiency, R&D efficiency, office efficiency, and external connection efficiency through digitalization, so that the overall operational efficiency can be improved. The third goal is to improve the quality of operations through digitalization.

Judging from the current progress, in terms of operational efficiency, a unified office entrance platform - PocketZTE has been created, which can "go all over the world in one machine". Through this transformation alone, the overtime rate of the company's approval in the past two years has dropped by an order of magnitude, for example, we may have had a 2% to 3% approval delay, but now it is controlled at about 0.2%.

Secondly, through the standardization and intensive management of contract review, the establishment of a contract and management center can shorten the time for the contract to take effect by half.

In addition, from the company's financial performance, the accounts receivable provision in the past two years has declined by magnitude, inventory turnover has gradually improved, and net operating cash flow has continued to reach a new high. The improvement of the quality of operations behind these financial indicators is inseparable from digital transformation.

In summary, ZTE is reconstructing the entire office, R&D, and operation process through digital concepts and technologies, and through this process, it is committed to building an ultimate cloud company. Digital transformation has a long way to go for ZTE, but we believe we are on the right path.

Build a "1+2+N" large terminal ecosystem to be a "pioneer" of cutting-edge technology

With the help of the momentum of domestic 5G development, ZTE terminals adhere to the attitude of "creator" to promote cutting-edge technological innovation and commercial use. The launch of several flagship innovative products this year has not only received great attention from consumers, but also received good feedback on market performance.

Facing the trend of Internet of Everything, ZTE focuses on building a "1+2+N" large terminal ecosystem and building a complete set of intelligent terminal solutions around mobile phones. On the basis of consolidating technical capabilities and product strength, increase brand investment and channel construction. This year, it plans to build 5,000 offline sales channels, and 4,000 have been completed so far. In the future, the company will also strengthen the level of refinement and use digital operation methods to do detailed service management in place.

For overseas markets, ZTE has always emphasized the need for steady operation. Due to the different market environments in various countries, the 5G development stage is also different, the Application of 5G in Europe and Asia-Pacific is relatively widespread, and the Latin American market is also at the node of 4G to 5G iteration, and there is still huge market potential. In the face of different market environments and policies in each country, the company adopts the method of national policies to continuously improve the operation capacity of intensive cultivation and sustainable development in major countries. Regardless of product quality to service, ZTE is unswervingly showing the overall image of a global brand with strength, attitude and foundation.

In the context of repeated epidemics in the second quarter of overseas, the terminal market has risen against the trend, which verifies the effectiveness of the company's strategy and deployment.

In terms of responding to the epidemic, the challenges brought by the tense situation of the global supply chain to the operation, ZTE Terminal's deep cultivation in the international market and its strong supply chain system for more than 20 years have provided a solid support guarantee for dealing with these sudden and uncertain risks in the international market. This year, ZTE terminals put forward the goal of 50% annual growth in overseas markets, and will focus on Asia-Pacific, Europe, the Middle East and Africa and Latin America.

ZTE Terminal is a company driven by product power, positioned as a pioneer, not only with innovation, but also with action.

ZTE terminal will be the first to apply under-screen camera technology and computational photography to mobile phone products, but also leading the mobile phone industry to open up a new track. As an innovation leader, more friends are actively exploring and working with the company to bring better services and experiences to consumers. The "creative power" of ZTE mobile phones has been unanimously recognized by the industry and consumers.

Third, ZTE Terminal has reorganized the positioning and direction of its multi-brand, and after integrating the ecological strategy, the brand has made great progress in brand power and recognition in its respective audience groups and markets. In the second half of the year, the goal is still very clear, that is, to maintain the momentum of our growth.

All in all, ZTE Terminal will achieve three major insistences: the first is to adhere to scientific and technological innovation, continue to break down technical difficulties and barriers, and explore new possibilities and directions; the second is to adhere to the "1+2+N" ecological layout to truly achieve an integrated and intelligent future life; the third is to adhere to the strategic investment of products, brands, and channels, and coordinate efforts, so that everyone can clearly understand what we have done, how we are doing, and how we will develop and explore in the future.

Actively respond to the problem of production capacity in the semiconductor industry

The tight production capacity of the semiconductor industry is a common problem faced by the whole industry, and ZTE is naturally no exception. But we believe that as long as we are better prepared to face difficulties and react faster, we are capable of turning such crises and challenges into opportunities.

For the supply chain, ZTE has made several preparations: first, in research and development to achieve high compatibility and replaceability, for the supply chain selection surface increased the width; second, strengthened the strategic cooperation with the head supply chain, head enterprises, so that our continuous ability to take goods has been improved; third, gradually strengthen the forecasting ability, increase the industry production capacity is tight, long procurement cycle, poor supply elasticity and other key risk materials in advance to prevent supply interruptions. Through these three points, we are more prepared to deal with the risks of global semiconductor production capacity, the response speed is faster, and we are confident that we can turn crises and challenges into opportunities.

Problem-driven communication technology iteration 6G pre-research to promote 5G development

There is a saying in the field of communication called the ten-year generation, often in the application of a generation of mobile communication technology at the same time, the new generation will already begin to pre-research. In 2019, the first year of 5G large-scale commercial use, which is widely believed, ZTE has launched pre-research on 6G. There are two very important drivers for the development of 6G, the first is the evolution of 5G, and the second is the iteration of generations.

From the first factor, the success of 5G will be a good foundation for the development of 6G, because all innovation is used to solve problems and create value by solving problems. The evolution of 5G With the expansion of the 5G market, operators will have higher pursuits for the entire energy efficiency and cost efficiency. For example, a large number of industrial digital transformation applications need to have higher requirements for improving capabilities and performance. For example, the continuous pursuit of network intelligence will make the 5G evolution also need the introduction of some new technologies of 6G, so as to play a better role.

The second driver is intergenerational iteration. With the application and development of 5G, including the unprecedented growth of the entire digital society, the Internet of Everything will bring about a large leap in the demand for network performance and function, which will be driven by intergenerational iteration. For example, the future of the integration of the sky and the earth and the sea coverage, holographic communication, intelligent remote sensing, including fully intelligent applications, including AI Internet, perception of the Internet, etc., these scenarios alone rely on the evolution of 5G may not be able to solve the problem, it will require the introduction of 6G.

ZTE has conducted in-depth research and layout on many key technologies since the launch of 6G research and development in 2019, such as solving the problem of limited coverage at higher frequencies through intelligent hypersurface; for example, using better interference elimination technology, so that in the ultra-dense networking time can still get a relatively large capacity improvement; and similar to eMUSA, user sharing access, etc., we have already had a long layout in these areas.

More critically, ZTE is already conducting technical verification tests with operators. For example, the company and China Telecom and China Unicom, in the middle frequency and high frequency scenarios, carried out the field RIS, that is, the intelligent hypersurface to improve the coverage of the test; with China Mobile through the CASCADING of RIS low-frequency scenarios, to solve the problem of outdoor to indoor depth coverage, as well as to evaluate the improvement of its penetration characteristics.

The research on how 6G can drive the development of 5G is the test carried out on the 5G network. We stick to one view: problem-driven. Intergenerational is just a concept, just like we applied 5G MIMO technology to 4G networks in the 4G era, as long as it can solve problems, it is a good innovative application.

Building a green ICT base practices green 5G+ innovation empowerment in multiple fields

Green and low carbon is one of the core strategies of ZTE's future development. Based on ZTE's own advantages, on the one hand, it builds a green ICT base, provides high-performance and low-energy green infrastructure, and helps the ICT industry reduce its own carbon emissions. In terms of the underlying layer, it continues to evolve from chips, algorithms, and architectures to make products with higher performance, lower power consumption, and smaller volume; on the one hand, joint operators and partners conduct enabling research on green 5G+ innovation in the industry, and more than 60 demonstration projects have been implemented around the world.

In the field of intelligent manufacturing, ZTE, one of the largest electrolytic aluminum enterprises in Southwest China, Yunnan Shenhuo has jointly built a green smart factory with operators and partners, which optimizes the real-time monitoring and control of aluminum electrolyzers through the machine vision analysis of 5G+AI, improves the uniformity of alumina concentration distribution, and saves more than 90 million kWh of electricity per year.

In the field of energy, ZTE, China Southern Power Grid and Mobile has established the largest demonstration area for 5G intelligent power consumption in Nansha, Guangzhou, and by providing 5G differential protection, 5G does accurate load control, so that the impact of new energy access to the power grid is reduced. We have evaluated with China Southern Power Grid that by 2030, the capacity of new energy connected to the grid can be increased by 4 times.

At the same time, combined with the production of its own communication equipment, ZTE has built a global 5G intelligent manufacturing base in Nanjing Binjiang, a demonstration factory of "5G manufacturing with 5G". In the production process, through the analysis of the energy consumption of the whole production process, the process improvement is carried out in the high temperature aging link, and the automatic temperature regulation and precise temperature control are realized, and the energy consumption is reduced by 40%; in other links, through unmanned intelligent inspection and XR remote expert online guidance, it not only reduces carbon emissions, but also reduces the travel rate by 30%. The overall double carbon target is to achieve carbon peaking by 2030 and carbon neutrality by 2060.

Review: Tan Lugang