This week at Mobile World Congress Shanghai ZTE has outlined an array of deployment options for 5G, from cell site solutions to its focus on new R&D to drive down the opex profile of new solutions. It has also heralded significant 5G engagements with all of Cina’s main three MNOs – but outside of China, the test for ZTE will be how it can forge into new international markets.
The European opportunity
The vendor is an existing supplier in some European markets, including Germany and Belgium, and has made headway with Wind Tre in Italy and Hutchison Drei in Austria for 5G, but it is not deployed in the continent on the scale of home players Ericsson and Nokia, or national rival Huawei.
Recently, Nokia has made a point of stating that where it has incumbent status as a 4G vendor, it has not yet lost a 5G award. That makes tough conditions for a company that has Europe as one of its targets for 5G sales. But Xiao Ming, President, ZTE Global Sales, said that this could change as operators move from Non Standalone (NSA) mode, reliant on 4G, to Standalone (SA) 5G, where 5G radio networks can connect directly to 5G Core networks, enabling a wider variety of use cases.
“That’s just their marketing argument,” he said of the argument that 4G incumbency brings a key advantage. “So far what we are seeing in Europe is more marketing arguments for 5G than the real serious deployments of 5G. Most of the showcase announcements for 5G commercial networks are based on NSA, where you are not able to enjoy the most exciting features.
“Real 5G is based on SA: Orange for example has clearly expressed it would like to deploy SA 5G. In that extent SA structures in from 2020 onwards, not this year. This is where a challenger like ZTE is able to fairly compete with the incumbent suppliers. Of course we are also incumbent in many markets, but we are betting more and targeting more on the 5G SA scenario coming next year.”
Ming’s analysis may hold water in terms of timings, but in markets where operators have gone early to NSA mode, it seems unlikely they would then move to a new RAN vendor to upgrade to SA, rather than upgrade from NSA to SA with the existing 5G RAN supplier. In that regard, ZTE may be targeting a second wave of operators that move directly to SA.
Ming also said that ZTE would be attempting to move to a higher level of localisation in Europe, hiring staff that are committed to ZTE but also understand national and local markets closely.
Although Ming terms Europe a “key priority” for international sales, it is, of course, only a part of ZTE’s international profile.
Ming said that ZTE’s key current markets are the populous nations of South Asia – India, Pakistan, Bangladesh, Philippines, Indonesia and Malaysia. Here the company is engaged in RAN expansions and refreshes as carriers build out their infrastructure. India will also be a critical market for 5G sales, although Ming acknowledged that the market needs to find a rational price point where operators can invest at the levels they need in an extremely low ARPU market.