Annual Patent License Fee Exceeds USD 110 Million

ZTE Corporation (“ZTE”) (H share stock code: 0763.HK / A share stock code: 000063.SZ), a publicly-listed global provider of telecommunications equipment and network solutions, today announced it has gained the No. 1 ranking by lodging the most international patent applications in the first quarter of 2011, according to WIPO.

ZTE applied for 974 patents in the quarter, almost double the amount of second-placed Panasonic, which applied for 559 patents in the same period.

ZTE is also one of the top five companies in the world in terms of PCT patent applications, and the only Chinese company in this group.

In 2011, ZTE expects its PCT patent applications to grow rapidly, and ZTE is very likely to top the rankings in terms of international patent applications. In 2010, ZTE was ranked No. 2 with 1863 international patent applications. By 1Q 2011, the number of international patent applications already exceeded 50% of the total number lodged last year.

The opportunities presented by the coming LTE era and ZTE’s latest breakthroughs in the US and European markets have become a driving force for ZTE to take the lead in international patent applications.

“ZTE’s IPR strategy is in line with the company’s globalization strategy and market forecast. In support of the company’s developments in high-end markets, ZTE will continually invest in the field of IPR and keep up the momentum in international patent applications,” said Wang Haibo, ZTE’s IPR director.

In 2010, ZTE revenue from US and European markets increased 50% compared with the same period of last year, and accounted for 21% of the company’s total revenue.

ZTE continuously invests over 10% of its revenue in R&D. In the last four years, the accumulated R&D cost has reached as much as RMB 20 billion. In addition to independent innovation, ZTE has signed a number of cross licensing agreements with industry partners, either as licensor or licensee. In 2010, ZTE paid a license fee of 110 million USD, higher than other Chinese telecom vendors in terms of the percentage of operating revenue.

With its long-term accumulation in the IPR field, ZTE has applied for more than 35,000 patents domestically and internationally. Of these, over 90% are essential patents related to essential telecoms standards and core patents related to core telecom technologies. By 2010, ZTE was ranked No. 1 in China for 107 cloud computing patents applications. ZTE’s LTE patents applications account for 7% of the entire industry.

About ZTE

ZTE is a publicly-listed global provider of telecommunications equipment and network solutions with the most comprehensive product range covering virtually every sector of the wireline, wireless, service and terminals markets. The company delivers innovative, custom-made products and services to over 500 operators in more than 140 countries, helping them to meet the changing needs of their customers while achieving continued revenue growth. ZTE’s 2010 revenue led the industry with a 21% increase to USD10.609 billion. ZTE commits 10 percent of its revenue to research and development and takes a leading role in a wide range of international bodies developing emerging telecoms standards. A company with sound corporate social responsibility (CSR) initiatives, ZTE is a member of the UN Global Compact. ZTE is China’s only listed telecom manufacturer, publicly traded on both the Hong Kong and Shenzhen Stock Exchanges (H share stock code: 0763.HK / A share stock code: 000063.SZ). For more information, please visit www.zte.com.cn.

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