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ZTE to suffer huge losses due to export ban from US

17 April, 2018, 20:22 | Author: Janis Wilson
  • Secretary Ross Announces Activation of ZTE Denial Order in Response to Repeated False Statements to the U.S. Government

CHINESE TELECOMS OUTFIT ZTE has halted trading after was suspended from the United Kingdom and cut off from USA suppliers.

"It is entirely appropriate and part of NCSC's duty to highlight potential risks to the UK's national security and provide advice based on our technical expertise", said Ian Levy, the NCSC's technical director.

Separately, the U.K.'s National Cyber Security Centre warned the country's telecommunications companies and regulator that national security risks from using ZTE equipment and services "cannot be mitigated".

"If the issue can not be solved smoothly and immediately, we think that ZTE will face tremendous disaster and would be forced to scale back on its smartphone business, not only in the USA, but also in other markets", said Strategy Analytics analyst Woody Oh.

According to Reuters, US manufacturers provide up to a third of the components used in ZTE's network equipment and smartphones, so this seven-year-ban could have a disastrous effect on the company's business.

China telecoms firm ZTE Corp has been hit with a 7-year ban for a sanctions breach by the USA government.

ZTE halted its trading both in Hong Kong and Shenzhen on Tuesday pending the release of information.

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All this comes just as ZTE's financial performance was improving.

The Chinese firm also agreed to pay $890 million in fines and penalties, with an additional penalty of $300 million that could be imposed.

For all the latest news from the wireless networking and services sector, check out our dedicated Mobile content channel here on Light Reading. The US has now blacklisted ZTE, preventing it from using US components, along with issuing a bill which prohibits the purchase of Huawei products by public authorities. The legislation could stop Huawei and ZTE from selling gear, including networks and consumer devices, to operators that fulfill government contracts.

"We stand ready to take necessary measures to protect Chinese companies' legitimate rights and interests", it added.

President Donald Trump (L) shakes hands with Chinese President Xi Jinping during a state visit to Beijing in November 2017. -China Tension over trade between the world's two biggest economics. "I'm optimistic we will leapfrog China because key leaders in the administration, on Capitol Hill and at the FCC [Federal Communications Commission] are focused on the reforms needed to win the race". The official, speaking on the condition of anonymity, said the timing of the ZTE action was unfortunate because it could seem related to USA steps to stop alleged theft of intellectual property.

However, in the UK, Huawei equipment forms a key part of BT Openreach's 21st Century Network (21CN), as well as Openreach's G.fast fibre network upgrade. "The new punishment for [ZTE] could be viewed as an escalation", The New York Times said.

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