ZTE Reports Massive H1 Profit Gains Buoyed By Chinese 4G Expansion; And Other News


ZTE Reports Massive H1 Profit Gains Buoyed By Chinese 4G Expansion

Chinese telco equipment manufacturer ZTE has reported sizeable profit increases in the first half of 2016, booking 9.3% gains in profit to $270 million and a 4.1% increase in operating revenues to $7.2 billion. About 58% of its operating revenue growth came from domestic business whereas approximately 20% came from international dealings.

In so doing, ZTE gains further ground on its industry rivals, both domestic and foreign, including Ericsson and Nokia. On the other hand ZTE is still dwarfed by its domestic counterpart Huawei, currently the world’s largest telecommunications equipment maker, which reported astronomical 40% year-over-year revenue growth for the first six months of 2016.

Many of these gains can be imputed to the massive expansion of 4G networks undertaken by Chinese wireless service providers such as China Mobile, beyond which ZTE also grew its cloud computing and big data services to communications service providers and increased its involvement in video streaming and the internet of things.

Unlike their Western counterparts, Chinese state-owned telco suppliers focus on providing network hardware and equipment, components for which are partially supplied by the United States. ZTE encountered troubles earlier this year when it fell afoul of U.S. economic sanctions and was penalized with an export ban, which has since been suspended pending further assessment until November 28.

The looming curb on component shipments to ZTE from the US has heightened the uncertainty surrounding the Shenzhen-based company’s outlook. ZTE, for its part, has announced that it has oriented its stance to better anticipate virtualization, openness, intelligence, the internet of things, and cloudification. It has also allocated a sizeable portion of its total revenues- around 15%, to be more precise- to research and development.

That being said, ZTE is forecasting a decline for the second half of 2016 due to economic uncertainty and an unfavorable business climate:

“The development of traditional telecommunication industries will be subject to stronger challenges in the second half of 2016, given the slowdown in global economic growth and increasing uncertainties,” said ZTE Chairman Zhao Xianming.

Verizon Easily Outstrips T-Mobile, Sprint, and AT&T in Network Performance Assessment

Verizon snagged the top slot in J.D. Power’s national network performance rankings, called the “2016 Wireless Network Quality Performance Study – Volume 2.” It handily outperformed its domestic rivals, T-Mobile, Sprint, and AT&T in five of six U.S. regions assessed in the rankings.

Only regional carrier U.S. Cellular managed to outstrip Verizon Wireless in the North Central region, though Verizon did manage to come in a respectable close second.

While Verizon narrowly missed sweeping all six regions, its counterparts, performed rather inconsistently, notching varying results in the regions of the U.S. Sprint had a fairly positive showing, coming in second in the Southwest, West, Northeast, Southeast and Mid-Atlantic regions.

The J.D. Power survey was conducted using the input of 43,000 respondents on 10 problem areas of wireless performance, including dropped calls, calls not connected, audio issues, failed.late voicemails, lost calls, text transmission failures, late text message notifications, web/app connection errors, slow downloads/apps, and email connection errors.

Overall, the study found that network performance problems had increased incidence rates in urban areas due to the higher concentration of young, data-voracious users, underscoring the importance of increased infrastructural and network investment by carriers in urban areas. It also revealed that network performance quality was roughly on par with that of six months ago.

Samsung Pay Exceeds 100 Million Transactions

Samsung Pay, the South Korean tech giant’s mobile payment service, has facilitated roughly 100 million transactions within its first year of operation.

“Since its introduction a year ago, Samsung Pay continues to lead mobile payments by providing services that are simple, secure and virtually anywhere,” Samsung executive Injong Rhee said in a press release. “Our ambition to reach a world without wallets continues to draw ever closer, and this strong consumer adoption signals a shift in behavior and demonstrates the continued enthusiasm for a safer, smarter and better mobile wallet.”

Rolled out almost exactly a year ago this day, Samsung Pay has spread from South Korea to seven other major markets, including China, the US, Brazil, and Spain and is supported by more than 440 banks. Available on higher end phones, including Samsung’s flagship Galaxy smartphones, Samsung Pay functions as a mobile wallet and a replacement for your physical debit or credit card. It also provides other trimmings such as gift cards, redeemable coupons, and membership cards. There are currently 4 million registered membership cards in the US and South Korea, which Samsung points to as evidence that consumer behavioral trends are shifting to accommodate mobile transactions.

Samsung is not the only tech company active in the burgeoning mobile payment market. Apple and Google have notably released their own services. Samsung’s advantage, however, lies in the fact that it’s the biggest smartphone vendor in the world, having shipped nearly 80 million units globally last quarter.

Netflix Readies Itself For Temporary Video Downloads

All indications suggest that Netflix will release temporary video downloads as a feature on its video streaming platform by the end of the year.

Dan Taitz, CEO of Penthera, a company which specializes in providing software that enables video downloads to video streaming companies, states that it is only a matter of time.

“From industry sources, I know that Netflix is out in the market negotiating to get download rights in addition to streaming rights,” said Tiatz. “Content providers are getting asked that now from Netflix so [Netflix] can offer a download service.”

While Netflix leads in streaming video, it has been outpaced by competitors in video downloads. For instance, video-streaming archrival Amazon Prime Studios, has given its customers the option of downloading videos since last September. Though Netflix had previously averred that introducing additional options may have the unintended effect of paralyzing users with choice, causing anxiety and confusion, it appears to have changed its mind on the subject. Earlier this year, Netflix CEO Reed Hastings commented that he was open to the idea of downloadable video.

“While our focus remains on delivering a great streaming experience, we are always exploring ways to make the service better,” said Netflix spokesperson Anne Marie Squeo. But she adds, “We don’t have anything to add at this time.”

Taitz, for his part, sees downloadable video options as a natural progression from the proliferation of video streaming. He believes that once consumers are acclimated to the idea of downloading as a commonplace feature, they will grow to demand it.

If Netflix decides to pursue video downloading capabilities, it will have copyright and intellectual property issues to contend with. While all of its originally produced content will likely be available for download, as Netflix owns the content rights to it, the company will have to negotiate agreements with studios for downloading rights. It also has to determine which devices, mobile or otherwise, will support the feature.

“It would make sense to focus on mobile device support over streaming media boxes connected to the TV as that’s the real benefit of a downloading service,” notes Dan Rayburn, an analyst with Frost & Sullivan, “but the service will be limited in use to a degree, since mobile devices can’t store too many movies.”

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