After war of words China, Trump vows to help ZTE

14 May, 2018, 00:32 | Author: Salvatore Jensen
  • US authorities have banned firms from selling parts to China's ZTE for seven yearsMore

"If ZTE is truly considering selling its mobile handset business, then the potential end for the company is near", Earl Lum, the President of EJL Wireless Research, a consultancy and research firm based in the United States, said.

Somewhat bizarrely, Trump cited a loss of jobs in China as a motivating factor.

The Commerce Department recently barred ZTE from using US-made parts, effectively crippling its operations and leading to a shutdown of its factories.

Days after China's second largest telecom gear maker ZTE Corp. was slapped with intense U.S. sanctions that block American companies from selling components to the telecom equipment maker for seven years, now the U.S. President Donald Trump has had a change of heart.

Trump's reversal will likely have a significant impact on ZTE's US suppliers such as Qualcomm Inc and Intel Corp. "Commerce Department has been instructed to get it done!"

ZTE announced Wednesday that "the major operating activities of the company have ceased".

U.S. officials imposed the ban last month, saying ZTE failed to abide by an agreement to stop selling to Iran and North Korea.




Spokesmen for Zinke and Pompeo didn't immediately respond to a request for comment sent outside normal business hours.

ZTE paid over $100 million each to other United States suppliers in 2017 including chip makers Xilinx Inc and optical component company Acacia Communications and memory chip maker Sandisk, the ZTE official said.

Last week, the company said that its earnings have surged, reporting a 39 percent jump in net income for the first quarter.

"The company paid over US$2.3 billion to 211 U.S. exporters in 2017, a senior ZTE official said".

ZTE is not among Qualcomm's publicly disclosed largest customers, which include Apple Inc, Samsung Electronics Co Ltd and Chinese smartphone makers Oppo and Vivo. Last week, Telstra said it would stop sales of ZTE smartphones, though it indicated it was "hopeful that ZTE will be able to reach a resolution to this matter soon so that we can recommence selling Telstra-branded ZTE devices".

Before the U.S. components ban, ZTE was providing services for 100 million users in India, 300 million users in Indonesia and 29 million users in Italy, the official told Reuters.

For instance, MTN, a South Africa-based wireless carrier with 220 million customers throughout Africa and the Middle East, said the possibility ZTE would collapse forced the carrier to develop contingency plans.

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