Enterprise

ZTE resumes SA operations after US lifts ban

Fu Zhen, CTO of ZTE South Africa.
Fu Zhen, CTO of ZTE South Africa.

ZTE South Africa resumed operations immediately following the lifting of the ban by the US government and the company says it has "hit the ground running" in its local operations.

The recent US ban led to the corporation suspending business operations across the globe, including in SA. The US alleged equipment maker ZTE violated US export controls on Iran.

ZTE announced the US Department of Commerce and the company had reached a settlement agreement on 7 June and identified all further steps necessary, resulting in the denial order being terminated by 15 July.

This after the Chinese telecommunications company implemented all of the compliance requirements and was operating within hours of the lifting of the ban, at full capacity, with a new board of directors and global executive management team.

US commerce secretary Wilbur Ross said the government reached a deal with ZTE that reverses a ban on it buying parts from US suppliers, allowing China's second largest telecommunications equipment maker to get back into business.

Under the deal, ZTE was ordered to change its board and management within 30 days, pay a $1 billion fine and put $400 million in escrow. The US government suspended the 10-year ban but it can activate the ban if there are any violations.

Last month, ZTE revised its first-quarter results to a net loss, after the telecommunications equipment maker took into account the impact of the crippling US supplier ban.

The company said its net loss for the three months through March was 5.4 billion yuan ($790.62 million), compared to a net profit of 1.2 billion yuan a year earlier. Revenue rose 6.9% 27.5 billion yuan.

In a statement issued this morning, ZTE SA says it confirms that research and development (R&D), under the guidance of the denial order, did not impact R&D schedules or future business.

Moreover, ZTE and all its South African customers and alliance partners have resumed full business activities, it adds.

ZTE SA notes that customer support and staff morale never wavered during the time of the ban. Fu Zhen, chief technology officer of ZTE SA, says: "We work in an informed market in this country that has confidence in ZTE's intellectual property and R&D capabilities, as evidenced by the encouragement and patience of our customers during this difficult time.

"ZTE remains immensely appreciative of this support," he says. Fu notes ZTE SA continues with its support of the greater SA community through ongoing corporate social investment initiatives which never ceased during the suspension of operations period.

"We have in the past gone on record with our commitment to be a driving force in the upliftment of SA's crucial areas and specifically telecommunications. ZTE will continue to strive to improve structures and create better support for the future 5G network."

Fu adds that fibre alone will only benefit a small portion of the country but a combination of fibre and 5G can make it commercially viable to provide broadband to a much greater proportion of the population, and in doing so, address the needs of the greater community in SA.

"As the leading global innovator of 5G, ZTE will continue to be a driving force in South Africa to uplift telecommunications infrastructure, service our market and contribute to economic growth," he concludes.

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