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ZTE Vows to Fight Ban, Says Denial Order Will 'Severely Impact' the Survival of the Company

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Apr 20, 2018, 1:48 AM   by Eric M. Zeman   @zeman_e

ZTE today said the ban issued by the Commerce Department is unfair and overly severe in what mark its first public comments since the ban was announced. "The Denial Order will not only severely impact the survival and development of ZTE, but will also cause damages to all partners of ZTE including a large number of U.S. companies," said ZTE in a statement. The Bureau of Industry and Security banned U.S. companies from selling ZTE any hardware or software because the company didn't comply with a settlement agreement over an earlier transgression. In 2016, ZTE was caught shipping products to Iran, despite sanctions against the country. ZTE later settled with the government for $455 million and agreed to fire some executives and curb the bonuses of other executives. However, the company did not take the proper actions against its executives and later lied about it to the government. ZTE insists it has taken action against the responsible employees now and has formed committees to ensure it complies with the earlier settlement. "ZTE will not give up its efforts to resolve the issue through communication, and we are also determined, if necessary, to take judicial measures to protect the legal rights and interests of our company, our employees and our shareholders, and to fulfill obligations and take responsibilities to our global customers, end-users, partners and suppliers," said ZTE. Qualcomm, which makes the Snapdragon processors inside ZTE phones, is one of many component suppliers that will be impacted by the ban. More importantly, ZTE may lose the ability to license the Android operating system from Google. Without access to Android, ZTE's entire phone business could be in jeopardy. Google has yet to comment on the matter.

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