ZTE s Investment in Germany. Germany Trade & Invest Events, 2. and 4. September 2014, Guangzhou and Shenzhen

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1 ZTE s Investment in Germany Germany Trade & Invest Events, 2. and 4. September 2014, Guangzhou and Shenzhen

2 > Internal Only Contents 1. ZTE Corporation Overview 2. ZTE in Europe and Germany 3. Germany as a good Business Location

3 ZTE Overview Founded in 1985 ZTE is a multinational telecommunication company, HQ in Shenzhen/China ZTE serves 500+ operators in 160+ countries The company has almost 65 thousand staff, amongst them 30 ths. technical staff ZTE has 107 global branches, 18 R&D centers worldwide, incl. USA and Europe Committed to generate optimal returns for shareholders and give back to society 3

4 China s First A to H Listing Company Listed in Shenzhen as an A Share Stock in 1997, listed in Hong Kong as an H Share Stock in 2004 A-shares in circulation account for 81.37% of ZTE s share capital. H-Shares % net profit in 1rst HY 2014 in circulation account for 18.30% of share capital. Tripling of net profit in 1rst HY 2014 due to 4G TD-LTE contract from China Mobile Operating Revenue 232 (hundred million RMB)

5 Revenue Shares Per Business Unit Terminals Per Region Africa Software, Service and others 20% 31% Europe, Americas and Oceania 25% 9% 47% China 49% 19% Carrier Networks Asia (Excluding China)

6 A Leader in the 4G Era 13

7 Worldwide Top 5 in Handset, Top 6 in Smartphones 15 years of handset design experience 0ver 500 mio. handsets shipped until now 42 mio. Smartphones shipped in 2013, target: 60 mio. In 2014 ZTE branded phones since 2012 Top 3 smartpone seller in the US Ambition to be Global Top-3 Smartphone Vendor

8 > Internal Only Contents 2. ZTE in Europe and Germany

9 Overview on ZTE Footprint in Europe Started in 2005 Offices in more than 20 countries 2 R&D Center 2 Customer Support and Training Center 3 Logistics Center 1 NOC 1 Joint Innovation Center Nearly 2000 employees in Europe Multi-national teams 70%+ of Europe s Top customers choose ZTE as their reliable Partner National Offices in WE & NE Region National Offices in EE&CE Region Division IV & WE Headquarter R&D Center Customer Support and Training Center Logistics Center NOC Joint Innovation Center 1

10 ZTE History in Germany 2005 Foundation of ZTE Deutschland GmbH 2008 Opening of ZTE Office in Bonn to serve DT 2010 Opening of a second office in Dusseldorf, to support the E-Plus rollout 2013 Foundation of ZTE Services Deutschland GmbH and acquisition of ALNS 2014 Since 8. January responsible for Operate & Maintain the E-Plus Network Copyright ZTE Corporation. All rights reserved.

11 Fact Sheet ZTE Germany 2014: 750 new local employees more than 1000 employees working for ZTE Germany new offices all over Germany, also Leipzig and Berlin = 15 in total Member of VATM and Bitkom ZTE Germany is the largest subsidary of ZTE in Europe Hamburg Hannover Ratingen Düsseldorf Bonn Frankfurt Berlin Leipzig Karlsruhe Nuremberg Munich

12 B2C Business in Germany: Handsets ZTE branded phones since 2012 Marketing with Mobile Operators like Telefónica, Vodafone and DT Marketing through the channel market, with distributors like Ingram Micro (Media Market, Saturn) Online marketing on E-Bay

13 B2B Business: Infrastructure References in Germany Tele2 - Business CPEs Primacom - DWDM network Netcom Kassel - Vectoring DSLAMs and IPTV Inquam - CDMA450 Network Michael Telecom - VCS distributor

14 Since 2009: Rollout Services for E-Plus At a glance ZTE provides Rollout Services for E-Plus since 2009 We are strong regional oriented and provide our services from our branch offices Our comprehensive ERP connection with E-Plus allows a seamless delivery process and supply chain Copyright ZTE Corporation. All rights reserved.

15 2014: Operations and Maintenance Services for E-Plus A comprehensive contract for all Operation and Maintenance activities in the RAN, Transport and Core network in Germany has been signed Contract duration 5 years Signature in Feb Acqusition of Alcatel-Lucent Network Services Operations start date 8 th of January 2014 Copyright ZTE Corporation. All rights reserved.

16 70 Mio. Euro Investment in Germany and Europe Largest Managed Services Project in Europe in the field of telecommunication (by scope, by employees) Purely ZTE investment Major investement into the German and European market by a Chinese company Strong committment to Germany and Europe as a good business location Good basis for future growth Copyright ZTE Corporation. All rights reserved.

17 Social Responsibility We are the first Chinese company in Germany with a Labour Agreement in place All former Employees have been transferred with previous conditions We established a strong local HR Team to act according local requirements and ethics A Workers Council is in place to support employee belongings Copyright ZTE Corporation. All rights reserved.

18 > Internal Only Contents 3. Germany as a good Business Location

19 Good Reasons for Investments in Germany Economy and Infrastructure Germany is located in the heart of Europe and has Europe s strongest economy Good transportation infrastructure, good airport connection Strong economic ties between Germany and PR China Education and Workforce Very good education leads to a qualified workforce and makes it easy to recruit qualified personnel Manifold cooperation between Chinese and German universities: Chinese students build the largest community of foreign students in Germany Climate for Investments Asian investors are very much welcome = Friendly climate for investors Strong support by Federal Trade & Investement Agencies like GTAI, Eastern Germany Team by GTAI

20 China-friendly Environment Big Chinese Community Almost Chinese expats Largest community of foreign students Chinese Infrastructure Many Chinese shops (restaurants, supermarkets etc.) 14 Confucius Institutes, also in Leipzig Schools for Chinese kids Chinese are welcomed Asian people have a good reputation in Germany China is regarded as fascinating and rising country

21 Good Reasons for Telco Investments in Germany Center of European Telco Industry Market Opportunities Large globally operating network operators are present in Germany and have decision making roles for international activities (Vodafone, Telefónica, Deutsche Telekom) High density of various telecommunications businesses Germany is an important market for the telecommunications industry and a European hub for R&D Good business opportunities for high-tech products Trusted Reference A success story from the German market has significant radiation and creates a positive image for all European activities The industry values trustful cooperation and long-term development strategy

22 Platform 1: IFA attracts international visitors and media

23 ZTE Smartphones displayed at Ingram Micro Booth for retailers

24 Press Conference with INTEL PR results 150+ journalist attended Spokesperson: Christopher Edwards, European Business Development and Marketing Director Presentation of Cooperation between INTEL and ZTE, presentation of Grand X IN Smartohone online clippings in German media Very good international coverage Agenda setting with INTEL: ZTE is the first company to launch an INTEL based based phone in Europe

25 Platform 2: CeBIT Exhibition 2013

26 Platform 3: Fortuna Soccer Sponsoring, Season 2012/2013

27 Support from Germany Trade & Invest Consultancy to realize advantages regarding trade/business tax Consultancy regarding favorable policy of investment Providing relationship to the minstry of Economy Providing relationships to R&D facilities like cooperations with universities Great networking opportunities at manyfold events and conferences Support with VISA problems Help to communicate ZTE s investment in Germany Making use of ZTE as a testimonial

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