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ZTE has been singled out on the issue of national security by both the UK and US governments
ZTE has said that it is currently investigating the "full range of potential implications" following yesterday’s governmental warnings from the US and the UK.
"ZTE is aware of the denial order activated by the United States Department of Commerce. At present, the company is assessing the full range of potential implications that this event has on the company and is communicating with relevant parties proactively in order to respond accordingly," the company said in an online statement to the press.
ZTE has suspended trading of its shares on the Hong Kong and Shenzhen Stock Exchanges following moves by the US and UK governments that will effectively ban ZTE from operating in either country.
The move comes amid a slew of US trade tariffs aimed at curbing Chinese influence in the US economy.
In practical terms, ZTE will feel the pinch in its manufacturing process, as the company currently uses Intel and Qualcomm chips in some of its high end smart phone handsets. Initially, ZTE could look to manufacturers in Taiwan to bridge this gap.
ZTE will also experience a big hit to its potential markets if it can no longer sell its handsets in the UK and the US. Last year, ZTE sold 40 million handsets in the US alone, according to a report in The Financial Times.
ZTE will also be reeling following Britain’s National Cyber Security Centre’s warning to UK telcos to avoid working with ZTE on the grounds of national security. The UK government has yet to comment on the situation.
