ZTE
Mr. Ziyang Xu (CEO & Exec. Director)
Ms. Ying Li (Exec. VP & CFO)
Summary
ZTE Corporation provides integrated communication information solutions in the People's Republic of China, rest of Asia, Africa, Europe, the United States, and Oceania. It operates through three segments: Carriers' Networks, Government and Corporate Business, and Consumer Business. The Carriers' Network segment provides wireless access, wireline access, bearer networks, core networks, telecommunication software systems and services, and other innovative technologies and product solutions. The Consumer Business segment offers smart phones, mobile data terminals, home information terminals, and innovative fusion terminals, as well as related software application and value-added services. The Government and Corporate Business segment focuses on providing informatization solutions for the government and corporations through the application of products, such as communications networks, Internet of Things, big data, and cloud computing. The company was founded in 1985 and is headquartered in Shenzhen, the People's Republic of China.
History
ZTE, initially founded as Zhongxing Semiconductor Co., Ltd in Shenzhen, Guangdong province, in 1985, was incorporated by a group of investors associated with China's Ministry of Aerospace Industry. In March 1993, Zhongxing Semiconductor changed its name to Zhongxing New Telecommunications Equipment Co., Ltd with capital of RMB 3 million, and created a new business model as a "state-owned and private-operating" economic entity. ZTE made an initial public offering on the Shenzhen stock exchange in 1997 and another on the Hong Kong stock exchange in December 2004.While the company initially profited from domestic sales, it vowed to use proceeds of its 2004 Hong Kong IPO to further expand R&D, overseas sales to developed nations, and overseas production. Making headway in the international telecom market in 2006, it took 40% of new global orders for CDMA networks topping the world CDMA equipment market by number of shipments. That same year also saw ZTE find a customer in the Canadian Telus and membership in the Wi-Fi Alliance.By 2009, the company had become the third-largest vendor of GSM telecom equipment worldwide, and about 20% of all GSM gear sold throughout the world that year was ZTE branded. As of 2011, it holds around 7% of the LTE patents.
In March 2017, ZTE pleaded guilty to illegally exporting U.S. technology to Iran and North Korea in violation of trade sanctions, and was fined a total of US$1.19 billion by the U.S. Department of Commerce. It was the largest-ever U.S. fine for export control violations.ZTE was allowed to continue working with U.S. companies, provided that it properly reprimand all employees involved in the violations. However, the Department of Commerce found that ZTE had violated these terms and made false statements regarding its compliance, having fired only 4 senior officials and still providing bonuses to 35 other employees involved in the violations. On 16 April 2018, the Department of Commerce banned U.S. companies from providing exports to ZTE for seven years. At least 25% of components on recent ZTE smartphones originated from the U.S., including Qualcomm processors and certified Android software with Google Mobile Services. An analyst stated that it would take a significant amount of effort for ZTE to redesign its products as to not use U.S.-originated components.On 9 May 2018, ZTE announced that, although it was "actively communicating with the relevant U.S. government departments" to reverse the export ban, it had suspended its "major operating activities" and trading of its shares. On 13 May 2018, U.S. president Donald Trump stated that he would be working with Chinese president Xi Jinping to reverse the ban. It was argued that the export ban was being used as leverage by the United States as part of an ongoing trade dispute with China. On 7 June 2018, ZTE agreed to a settlement with the Department of Commerce in order to lift the import ban. The company agreed to pay a US$1 billion fine, place an additional US$400 million of suspended penalty money in escrow, replace its entire senior management, and establish a compliance department selected by the department.Later that month, the U.S. Senate passed a version of the National Defense Authorization Act for Fiscal Year 2019 that blocked the settlement, and banned the federal government from purchasing equipment from Huawei and ZTE . The settlement was criticized by Senators as being "personal favors" between Trump and the Chinese government, as the Chinese government issued a loan for an Indonesian theme park project with a Trump golf course following the May 2018 announcement. However, the House version of the bill, signed by Trump, did not include the provision blocking the settlement, but still included the ban on federal purchase of Huawei and ZTE products.On 13 July 2018, the denial order was officially lifted.In January 2019, it became public that ZTE has retained the services of former senator Joe Lieberman as a lobbyist.In June 2020, the Federal Communications Commission designated ZTE as a threat to U.S. communications networks. In July 2020, the U.S. government banned companies that use ZTE from receiving federal contracts. The FCC denied the company's appeal of the decision in November 2020.In September 2020, the U.S. Department of Justice filed a criminal complaint against ZTE accusing it of using two shell companies named Ryer International Trading and Rensy International Trading to violate sanctions against North Korea. In December 2020, the U.S. Congress included $1.9 billion to help telecom carriers in rural areas of the U.S. to remove ZTE equipment and networks they had previously purchased.In January 2021, Gina Raimondo, President Joe Biden's nominee for United States Secretary of Commerce, said in her confirmation hearings that she would protect U.S. networks from interference by Chinese companies including ZTE. In June 2021, the FCC voted unanimously to prohibit approvals of ZTE gear in U.S. telecommunication networks on national security grounds.In 2022, ZTE was accused of violating its probation from its guilty plea for sanctions violations.
In 2020, it was disclosed that the United States Department of Justice opened an investigation into ZTE for potential violations of the Foreign Corrupt Practices Act.
Mission
Corporate Mission: To connect the world with continuous innovation for a better future
Vision
Corporate Vision: To enable connectivity and trust everywhere
Key Team
Mr. Junshi Xie (Exec. VP & COO)
Mr. Xiyu Wang (Exec. VP, CTO & CIO)
Mr. Junying Gu (Exec. VP & Exec. Director)
Mr. Jianzhong Ding (Head of the Securities Dept. - Fin. Dept., Co. Sec. & Sec. to the Board)
Mr. Matthew Bell (Chief Export Compliance Officer and Legal Counsel)
Wang Dong (Sr. VP, Chief Compliance Officer & Chief Legal Officer)
Ms. Xiaoyue Xia (Deputy Head of Dept of HR, Director of HR for Headquarters and Supervisor)
References
Mr. Ziyang Xu (CEO & Exec. Director)
Ms. Ying Li (Exec. VP & CFO)