Thursday, 10 May 2018 09:00

ZTE halts main business activities in US after ban Featured

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Chinese telecommunications firm ZTE has halted its main business activities in the US after a seven-year ban was imposed on American companies supplying it with components.

According to a Reuters report, in a regulatory filing on Wednesday US time, the company said: "As a result of the Denial Order, the major operating activities of the company have ceased.

"As of now, the company maintains sufficient cash and strictly adheres to its commercial obligations subject in compliance with laws and regulations."

Given that ZTE, the second biggest telecommunications equipment maker in China after Huawei Technologies, uses Android in all its smartphones, there have been rumours that it is holding talks with Google to see if it can continue to use the mobile operating system despite the ban.

As far as smartphone sales in the US go, ZTE sits fourth behind Apple, Samsung and LG.

ZTE gets about one-third of the components for its smartphones from Qualcomm and Intel. It has asked the US to consider a stay of the ban.

US officials visited China last week for discussions on what was shaping to be a trade war, after US President Donald Trump imposed duties on some Chinese imports. The ZTE issue is said to have been raised by China during these talks.

The US Department of Commerce imposed the ban on ZTE in April, with the department saying at the time that it was due to alleged false statements made by the company during talks in 2016 over a charge of shipping telco equipment to Iran and North Korea.

As a penalty, US firms cannot sell parts to ZTE for seven years.

ZTE was fined US$1.19 billion in March 2017 and also agreed to a seven-year suspended export ban which would take effect if it was found to be in violation of the Export Administration Regulations.

Subsequently, the Department of Commerce claims to have found that statements made by ZTE to the Bureau of Industry and Security were false.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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