NCSC advice to telecommunications sector about ZTE

NCSC warns UK telcos against ZTE equipment due to 'national security' concerns

ZTE won't be able to use Qualcomm's hardware or (perhaps more importantly) the brand for the next 7 years.

The Department of Commerce has now learned that ZTE made false statements to the US government during the 2016 settlement negotiations as well as the 2017 probationary period.

The NCSC's letter cited a settlement agreed between ZTE and U.S. officials back in March, when the company was fined $1.2bn after pleading guilty to criminal charges of violating United States sanctions on North Korea and Iran. Four senior managers and 35 members of staff were supposed to either be shown the door or had their bonuses removed, though the firm apparently paid the full amount to the nefarious employees further infuriating Ross. Now, it seems that ZTE will have to resort to companies like MediaTek for SoCs to use in its handsets. Acacia Communications Inc. shares fell by 34.7%, a drop influenced by the fact that almost a third of the company's 2017 revenue came from ZTE.

The Department of Commerce has now determined ZTE made false statements to BIS in 2016, during settlement negotiations, and 2017, during the probationary period, related to senior employee disciplinary actions the company said it was taking or had already taken.

ZTE didn't respond to calls seeking comment that were made after business hours in China. ZTE has relied heavily on the Dolby Atmos brand as a selling point of its smartphones, boasting that the devices' Dolby-branded speakers are among the best available.

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Douglas Jacobson, an exports control lawyer who represents suppliers to ZTE, called the ban highly unusual and said it would severely affect the company.

The U.S. government recently put pressure on telecommunications companies to stop buying Huawei networking equipment and consumer electronics products.

ZTE, which devised elaborate schemes to hide the illegal activity, agreed to plead guilty after the Commerce Department took actions that threatened to cut off its global supply chain. The official, speaking on the condition of anonymity, said the timing of the ZTE action was unfortunate because it could seem related to USA steps to stop alleged theft of intellectual property.

The U.S. government had allowed the company continued access to the U.S. market under the 2017 agreement.

The denial order against ZTE comes amid brewing tensions between the USA and China that have raised concerns of a trade war between the world's two biggest economies.

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