ZTE [0763:HK] has announced plans to sell its 90% stake in Caltta Technologies to Beijing E-Town Dragon Semiconductor Industry Investment Center for RMB1bn (USD154.7m), as reported by Yicai Global on January 12. Although ZTE provided no official reason for the sale, a person familiar with the deal stated that it gives ZTE new funds to focus on developing its 5G business.
The deal comes as ZTE scales up its efforts to accelerate 5G development and increase its competitiveness. ZTE vice president Cui Li recently stated that the technology firm plans to occupy a 35% share of China’s 5G market, an increase from its current share in the country’s 4G market. In the first three quarters of 2020, ZTE ranked among the top seven telecom network suppliers globally. During this period, ZTE increased its share to 11%, up from 9% in 2019. The increase is attributed to the fast deployment of 5G infrastructure across the Mainland. According to MIIT, to date, almost 700,000 5G base stations have been deployed across the Mainland, which far exceeds its target of 500,000. In late December 2020, MIIT announced plans to further accelerate the deployment of 5G across the Mainland and build a minimum of 600,000 5G base stations in 2021.