US export ban kills ZTE’s international operations

Chinese smartphone manufacturer ZTE may have to shutter its doors for good, this after sanctions placed on the firm by the US has made it extremely difficult to source parts from key US companies.

On Wednesday, the firm confirmed that its international operations have been terminated, which means that its devices will no longer retail in the likes of South Africa.

This may have a knock on effect for South African companies that rely on ZTE’s technology, notably MTN.

“Networks that use ZTE equipment include South Africa, Nigeria, and Uganda. Some smaller networks such South Sudan, Republic of Congo Brazzaville, and Republic of Guinea Conakry also use ZTE in locations,” the company told MyBroadband.

The company, which was found in April to have violated US sanctions by supplying tech to Iran and North Korea, is now unable to acquire chipsets from Qualcomm and operating system or app licenses for Android from Google — two enormously important components for the modern smartphone.

ZTE is pretty damn big too. It currently ranks at China’s second largest smartphone maker and fourth in the US itself, and is known for its flagship Axon range, among others. Just this year in March, the firm debuted the dual-screen Axon M concept which was possibly heading to South Africa.

But it’s not going down without a fight.

“As of now, the Company maintains sufficient cash and strictly adheres to its commercial obligations subject to compliance with laws and regulations,” ZTE stated in an investor letter.

“The Company and related parties are actively communicating with the relevant U.S. government departments in order to facilitate the modification or reversal of the Denial Order by the U.S. government and forge a positive outcome in the development of the matters.”

Feature image: Gearburn/Hadlee Simons