Telstra halts sales of ZTE-made handsets

Telstra halts sales of ZTE-made handsets

Telstra halts sales of ZTE-made handsets

Chinese telecommunications company ZTE has stopped major business operations, it has revealed, as a outcome on the USA ban on selling components to the maker.

The Chinese OEM said in its exchange filings that their major operating activities have been halted after the enforcement of the Denial Order.

The ban came as huge blow to the company, seeing that 25 to 30 percent of its components came from companies in the U.S. According to analysts, even if ZTE can manage to fill the gap, it will still find it hard to remain competitive.

However the company stated that it still has enough money to fulfil its commercial obligations, and is communicating with the USA government to try and modify or reverse the blocking order.

Although ZTE is closed, it is still trying to have the ban modified or reversed.

Telstra's Michele Garra - the company's head of innovation, product innovation and strategy in the telco's consumer business - said the decision was a product of a new prohibition on U.S. companies selling device components and software to ZTE that has led to the company halting operations. The ban was implemented after ZTE was discovered to have violated a 2017 settlement regarding the evasion of USA sanctions against North Korea and Iran. It said that it had submitted a request to the US Commerce Department for the suspension of the ban.

The telco now sells 19 phones and three mobile broadband modems that are Telstra branded but manufactured by ZTE. This export ban prevents companies from supplying ZTE with parts and technology. -China trade talks that are now underway, as the latter country tries to avert the threat of an all-out trade war.

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The news was revealed in a press release which noted that, "the major operating activities of the Company have ceased".

A US delegation traveled to Beijing last week to discuss the brewing trade conflict with their Chinese counterparts.

ZTE wasn't kidding around when it suggested that a U.S. Department of Commerce order would "severely impact" its survival.

ZTE is one of the biggest telecom equipment makers globally but since they heavily rely on U.S companies like Qualcomm and Intel for their components, they are now unable to produce smartphones and devices. Unlike many online publications, we don't have a paywall or run banner advertising, because we want to keep our journalism open, without influence or the need to chase traffic.

We've reached out to ZTE for further comment on the matter.

According to reports, workers at the company's headquarters in Shenzhen are reporting to work but "with not much to do". The company could not compete due to an export ban from the United States.

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