Hong Kong stock prices have risen for two consecutive working days. Previously, on December 21, 3GPP officially signed and passed the first standard for 5G non-standalone networking in Lisbon, the capital of Portugal.

On May 31, 2016, Shenzhen Nanshan District Science and Technology Park, ZTE Company exterior. Picture/Visual China

On the other hand, on December 10, the incident of a 42-year-old employee of a company owned by ZTE being laid off and jumping off a building hit the internet. This incident triggered a big discussion about the mid-life crisis among employees of technology companies, and also exposed the problems of ZTE itself.

Although 5G standards are being advanced, it will still be quite some time before 5G is truly commercialized. According to GSMA statistics, fixed asset investment by global mobile operators has turned downward since 2016, directly decreasing by 6%. This trend will continue until 2020. In the Chinese market, the capital expenditures of the three major operators decreased by 46.21 billion yuan in 2017, a year-on-year decrease of 13%. This is a severe test for upstream communication equipment manufacturers, especially ZTE.

ZTE Group reduced its employees by 3,154 people last year

On December 10, a 42-year-old employee of ZTE Netcom, a subsidiary of ZTE Corporation, Ou Jianxin , jumped from the ZTE Research and Development Building in Shenzhen. This incident has aroused great concern in society, and there is a lot of discussion about the "midlife crisis" of engineers and programmers.

Behind this, ZTE Corporation itself is also facing a "midlife crisis."

According to relevant media reports, ZTE Netcom's large-scale layoffs this time are not due to Netcom's own layoffs, but the parent company ZTE Corporation ordered Netcom to reduce its staff.

"The company is currently operating normally, and there is no large-scale layoff plan." In this regard, the person in charge of ZTE's brand business told reporters that the reason for Ou's suicide will be subject to the police announcement.

In January this year, foreign media reported that ZTE would lay off about 3,000 people. According to communications expert Liu Qicheng, it is normal for communications equipment manufacturers to lay off employees.

ZTE’s 2016 financial report shows that as of the end of 2016, the Group had a total of 81,468 employees (of which the total number of employees in the parent company was 57,040), with an average age of 33 years old. As of the end of 2015, ZTE Group had a total of 84,622 employees (of which the total number of employees in the parent company was 60,758), with an average age of 30 years old. In other words, the number of people in ZTE Group decreased by 3,154 in 2016, of which the number of employees in the parent company decreased by 3,718.

According to the 2015 annual report, ZTE had a total of 44 directors, supervisors, and senior executives, which dropped to 39 by the end of 2016. In 2015, the per capita salary of directors, supervisors and senior executives was 1.88 million yuan, which dropped to 1.72 million yuan in 2016. Among them, Zhao Xianming, then chairman and president, received remuneration as high as 7.339 million yuan in 2016.

In contrast, on December 17, internal documents leaked from Huawei showed that Huawei Honor level 13 employees can receive level 23 bonuses after completing sales targets, while Huawei Honor level 23 employees’ bonuses It can reach nearly one million yuan.

Zhao Xianming mentioned in his 2017 New Year's speech that "the company is encountering the biggest crisis in its 31 years of existence, and the company must face the future." In March 2017, ZTE Chairman and President Zhao Xianming resigned as chairman of the seventh board of directors, but still Continue to serve as executive director and president of the company.

’s revenue is less than one-fifth of Huawei’s

. One year after being “banned” by the United States, ZTE and the US government finally reached a settlement. On March 7, 2017, ZTE reached a settlement with the US government regarding the US government’s export control investigation case. ZTE agreed to pay a fine of US$892 million. This also led to ZTE's 2016 financial report showing a large loss.

ZTE’s 2016 financial report shows that in 2016, it achieved operating income of 101.23 billion yuan, a year-on-year increase of 1.0%, mainly due to a slight year-on-year increase in operating income from the operator network and consumer business; the net loss attributable to ordinary shareholders of the listed company was 2.36 billion. yuan, a decrease of 173.49% compared with the net profit of 3.207 billion yuan in 2015.

ZTE, which was on par with Huawei when it started, its revenue in 2016 was less than one-fifth of Huawei's. Financial data shows that in the first half of 2017, ZTE's operating income reached 54.011 billion yuan, a year-on-year increase of 13.09%. Huawei achieved sales revenue of 283.1 billion yuan in the first half of 2017, a year-on-year increase of 15%.ZTE's operating revenue in the first half of 2017 was less than one-fifth of Huawei's.

However, in the view of industry expert Liu Qicheng, except for Huawei, other communication companies are having a difficult time.

In 2016, Nokia announced the completion of the acquisition of 100% of Alcatel-Lucent's equity transaction. After the acquisition is completed, there are only four global communication equipment manufacturers left, Huawei, Ericsson , Nokia, and ZTE.

Another giant in the communications industry, Ericsson's third quarter financial report showed that the company's net revenue was 47.8 billion Swedish kronor (approximately 38.77 billion yuan), a 6% decrease compared with the same period last year; the net loss was 4.3 billion Swedish kronor, The net loss in the same period last year was SEK 2 billion. In addition, Ericsson's global headcount decreased by 3,000 in the third quarter of this year. Kang Zhao, a communication expert at

, believes that there are only four communication system equipment manufacturers left, which also reflects the shrinking market. "Life is indeed difficult. Why are there only 4 companies left? It's because the shrinking market cannot support so many manufacturers. After the market shrinks, the number of communication equipment manufacturers is small, and it is difficult to increase the amount."

The communication industry is at the bottom of the "ten-year cycle"

The main source of income for communication equipment manufacturers is equipment procurement from global operators. The economic status of global operators directly affects the trend of equipment manufacturers.

Liu Qicheng told reporters, "Operators will invest in building networks and expanding capacity to purchase equipment from equipment manufacturers. Now that the global economy is in recession, operators do not invest much. There are three major markets in the world: China, the United States, Europe, the communications industry has a 10-year cycle, 4 5G has been built, so everyone invests less, and equipment manufacturers have a difficult time. "

Mobile communication network construction is a 10-year cycle, and 2010 is the peak period of 4G network construction. Based on this, it is estimated that it will enter operation in 2020. The stage when suppliers purchase 5G equipment.

On December 21, 3GPP (Mobile Communications Standardization Agency) officially signed and passed the first standard for 5G non-standalone networking in Lisbon, the capital of Portugal. Some people in the industry believe that this is a milestone in the 5G process. An industry insider believes that 5G will still not be commercialized in the short term. "5G should actually start commercial use around 2019," the person above said.

In addition, global operators have been impacted by the Internet industry and have gradually become mere conduits, lacking a large amount of funds to purchase equipment. Liu Qicheng said, "In the voice era, operators have very high profits. With the rise of mobile Internet in recent years, operators have been reduced to conduits. Voice revenue has declined, and traffic is increasing without increasing revenue. Operators have a difficult life and have no motivation to develop networks. Expansion is also a reason for the decline in revenue of equipment manufacturers. "

data shows that from 2012 to 2017, the total market value of Nasdaq Internet companies tripled in five years, increasing by 30% in one year. From the perspective of market value, the sales revenue of , Facebook is only US$36.4 billion, and the market value is US$520.2 billion, a difference of more than ten times. The sales revenue of Google is US$100 billion, and the market value is US$700 billion, a difference of 7 times. Alibaba’s sales revenue is less than 30 billion, while its market value is 460 billion, a difference of 15 times. As for telecom operators, China Mobile's sales revenue exceeds 100 billion, and its market value is less than 200 billion, less than twice that.

According to relevant media reports, Wu Hequan, academician of the Chinese Academy of Engineering and chairman of the Internet Society of China Wu Hequan pointed out at the "2018 ICT In-depth Observation Large-scale Report Conference and White Paper Press Conference" that "the data shows that those who sell equipment are not as good as those who provide services, and those who provide services no For example, in the Internet industry. "

ZTE is betting on 5G and the Internet of Things.

ZTE's 2017 semi-annual report shows that its largest revenue contribution is the operator network business, accounting for nearly 60%, followed by consumer business accounting for 30%. , government and corporate business only accounted for 6.97%.

The consumer business is ZTE mobile phone business. IDC data shows that ZTE's global smartphone shipments in 2016 declined by 36.5% compared with 2015. ZTE's mobile phone sales in 2015 were 56 million units, but China only contributed 15 million units. ZTE's domestic market share and brand awareness have fallen out of the top ten.

What deserves our hope is ZTE’s operator business.On December 22, ZTE announced that it would cooperate with Italian operators to conduct 5G trials. The trials will verify 5G services and technologies to support the timely deployment of commercial networks. An industry insider believes that ZTE has invested heavily in the carrier wireless product business and has considerable strength.

Liu Qicheng said, "Without 5G, life for equipment manufacturers will be even more difficult. But it is hard to say how big the scale of investment in 5G will be. There is a 10-year cycle, 4G around 2010, and 5G around 2020. There is an investment of hundreds of billions, including peripherals." The investment is in the trillions, and equipment manufacturers will have a lot of income. "

However, 5G will not be commercially available for about two years, and it will be difficult to quench the thirst of the people far away. ZTE is also looking for another huge, fast-growing market.

"Now everyone is betting on 5G and the Internet of Things. It turns out that communication between people has a limited number of connections. There are many devices connected to the Internet of Everything, and the number of connections is unlimited." ZTE CTO Assistant Yu Yixiang told the media , the Internet of Things is the most complex and promising industry he has ever seen. From chips, modules, and terminals to platforms, networks, applications, and operations, the Internet of Things has finally ushered in this seemingly lengthy industrial chain. The best period for full maturity. "In China, operators such as China Telecom have established the world's largest NB-IoT network covering the entire country. Coupled with the original mature 4G and other network coverage of the three major operators, a powerful IoT basic network has become Huge driving force

(reporter Ma Jing)