ZTE Halts Operations, How Will This Impact Telstra?

Ann Santiago
May 11, 2018

ZTE, one of China's leading technology companies, will end "major operations" now that the USA government has barred American firms from doing business with the telecom equipment maker.

ZTE halting operations "will hit each firm within the worth community throughout the globe", stated Charlie Dai, an analyst with analysis agency Forrester. Non-U.S. players like Taiwanese chip maker MediaTek have been stepping up in the meantime, but even with that support, it's tough to imagine ZTE efficiently rallying. "This egregious behaviour can not be ignored", Wilbur Ross, the U.S. secretary of commerce, said last month.

ZTE's brief statement gave few particulars, however the implications had been clear: a serious Chinese language firm is warning it might exit of enterprise due to the United States authorities.

In a move that is roiling the telecom industry worldwide, a global telecom equipment-maker has halted its main business operations.

According to experts, ZTE may become the first victim of the "new cold war" between China and the United States, the article says the New York Times. Both sides have threatened to implement billions of dollars worth of tariffs on goods from the other country.

Last month, the Department of Commerce officially instated the ban, alleging that ZTE had violated the terms of the sanction case.

US Commerce Department imposed a ban last month forbidding US companies from selling hardware and software to ZTE. ZTE denies the claim.

Although US officials have said the action taken against ZTE is not related to trade policy, some believe it is reflective of the wider treatment of Chinese technology firms by America.

A visit to ZTE's global site for devices redirects users to the corporate portal, although at the time of writing the US site is still functioning normally, with links to buy phones through carrier partners.

Those efforts so far appear to be unsuccessful.

Adding to ZTE's worries, the US Defense Department announced last week that it would ban the sale of phones manufactured by ZTE and Huawei at its military bases around the world due to concerns that Beijing could hack into phones for intelligence gathering purposes.

The UK government also revealed it was uncertain about ZTE shortly after, with the NCSC issuing a warning to UK telcos urging them not to use ZTE equipment. The company mentioned the change in a document published today, stating that "major operating activities...have ceased" without additional details on what, exactly, that means.

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