ZTE Corporation is a Chinese
partially state-owned technology company
that specializes in telecommunication
. Founded in 1985, ZTE is listed on both the Hong Kong
and Shenzhen Stock Exchange
ZTE operates carrier network
s, and telecommunication. Its core business is wireless
, access, optical transmission
, data telecommunications gear, telecommunications software
, and mobile phones
It also offers video on demand
and streaming media
ZTE primarily sells products under its own name, but it is also an OEM
. ZTE is one of the top five largest smartphone manufacturers in its home market.
The company has faced criticism in the United States
over potential ties to the Chinese government
that could enable surveillance
. In 2017, ZTE was fined for illegally exporting U.S. technology to Iran and North Korea in violations of economic sanction
s. In April 2018, after the company failed to properly reprimand the employees involved, the U.S. Department of Commerce
banned U.S. companies (semiconductor
s) from exporting to ZTE for seven years. The ban was lifted in July 2018 after ZTE replaced its senior management, and agreed to pay additional fines and establish an internal compliance team for 10 years.
In June 2020, the Federal Communications Commission
designated ZTE a national security threat, thereby barring it from any U.S. subsidies
200px|thumb|right|ZTE logo used until 2015
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
. Ties to the state notwithstanding, the firm evolved into the publicly traded ZTE Corporation, having made an initial public offering
(IPO) 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
. More customers in developed nations soon followed Telus's lead, and in 2007 ZTE sold to UK's Vodafone
, Spain's Telefónica
, and the Australian Telstra
in addition to garnering the greatest number of CDMA
contracts globally. By 2008 ZTE had achieved a global customer base, with sales in 140 countries.
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 key LTE
patents and that same year launched the world's first smartphone with dual GPS
navigation, MTS 945
. ZTE claims to devote 10% of its annual revenue to research and development, producing patents and utility licenses at a rapid pace.
ZTE has filed 48,000 patents globally, with more than 13,000 granted. In two consecutive years (2011 and 2012), ZTE was granted the largest number of patent applications globally, which is a first for a Chinese company.
U.S. sanctions and import ban
In March 2017, ZTE pleaded guilty to illegally exporting U.S. technology to Iran
and North Korea
in violation of trade sanction
s, 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
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" (including manufacturing) 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 (citing them as national security risks due to risks of Chinese government surveillance). The settlement was criticized by Senators as being "personal favours" 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 July 2020, the U.S. government banned companies that use ZTE from receiving federal contracts.
In September, 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 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
, Zhongxing Xin (; aka ZTE Holdings), an intermediate holding company, owned 27.40% stake of ZTE.
The shareholders of ZTE Holdings were Xi'an Microelectronics (; a subsidiary of the state-owned China Academy of Aerospace Electronics Technology
) with 34%, Aerospace Guangyu (; a subsidiary of the state-owned China Aerospace Science and Industry Corporation
Shenzhen Group) with 14.5%, Zhongxing WXT (; aka Zhongxing Weixiantong) with 49%, and a private equity fund Guoxing Ruike () with 2.5%.
The first two shareholders are state-owned enterprise
s, nominating 5 out 9 directors of ZTE Holdings, while Zhongxing WXT was owned by the founders of ZTE, including Hou Weigui, which Zhongxing WXT nominated the rest of the directors (4 out 9) of ZTE Holdings.
The mixed ownership model of ZTE was described as "a firm is an SOE
from the standpoint of ownership, but a POE rivately owned enterprises
from the standpoint of management" by an article in The Georgetown Law Journal
. ZTE described itself as "state-owned and private-run". The ''South China Morning Post
'' and the ''Financial Times
'' have both described ZTE as state-owned. Other scholars have noted the links between ZTE's state-owned shareholders and the People's Liberation Army
ZTE has several international subsidiaries in countries including Indonesia
, the United States, India
, Sri Lanka
, and Romania
engages in ICT industry and specializes in providing BSS/OSS, big data
products and services to telecom operators, and ICT, smart city
and industry products and services to enterprises and governments.
was a fully owned subsidiary of ZTE Corporation. The company has subsequently disposed of the majority of its equity in the company. In 2017 it reduced its stake to 49.9%.
is a renewables company with interests in electricity generation through solar parks in China and Pakistan and palm oil cultivation in Indonesia to produce biofuels. ZTE is a major shareholder and was instrumental in the creation of the company in 2007 but holds a minority of the shares in the entity.
ZTE agreed to take over a 48% stake in Turkish company Netaş Telekomünikasyon A.Ş. for $101.3 million from One Equity Partners
in December 2016. Following the acquisition in August 2017, ZTE has become its largest shareholder while Netaş remains an independent company.
ZTE operates in three business segments: carrier networks, government and corporate business, and consumer business.
Products can be roughly arranged into three categories: equipment used by network operators (link
s and nodes
, etc.), equipment used to access networks (terminals
), and services, which includes software. In October 2010, ZTE's unified encryption module received U.S./Canada FIPS140-2 security certification, which made ZTE the first vendor from P.R. China to successfully validate modules according to the NIST FIPS140-2 standard under the CMVP program.
ZTE was also reported to have developed identification cards for Venezuela that were allegedly used for tracking and social control.
As of 2012, ZTE is the 4th largest mobile phone vendor.
[ It also placed fifth on IDC's smartphone vendor leaderboard. Strategy Analytics counts ZTE as 4th largest smartphone vendor (5% market share) in Q2 2013. It also manufactures tablets.
In November 2017, ZTE announced the Axon M. The two screens can run separate applications, or spread one app over the combined display size of 6.75-inches. The second screen also works as a kickstand.
In 2019 was announced the ZTE AXON S, a brand new concept of smartphone with no holes or apertures thanks to a lateral slider.
The MF60 and MF80 4G mobile hotspots were announced in August 2011.
At Mobile World Congress 2014 in Spain, Microsoft announced that ZTE is the latest hardware partner of Windows Phone platform.
Network Operators Equipment, Network Nodes and Network Elements
ZTE is also a provider of Core Routing and Core Network equipment, also known as Network Elements such as:
* GGSN (GSM / UMTS), PGW (LTE EPC), PDSN (CDMA)
* ZTE ZXR10-Series core switches and core routers
* MPLS routers
* Base stations, some of them developed with OBSAI – Open Base Station Architecture Initiative architecture, including China-specific Time-Division Long-Term evolution aka TD-LTE radio protocol support and CDMA-based EV-DO equipment
* Telephone switches
* legacy WAP and MMSC equipment
* WiMax products, based on ZTE SDR platform, part of the Uni-RAN technology, Uni-Core core network equipment, and services to support the WiMAX 4G network over 3.5 GHz frequencies.
* SDN / NFV products as seen through Open Daylight Project
During the 2000s, the majority of ZTE's customers were developing country mobile network operators, but ZTE products see use in developed countries as well. The UK's Vodafone, Canadian Telus and Fido, Australia's Telstra, as well as France Telecom have all purchased equipment from ZTE.
Many Chinese companies are also ZTE customers, including China Netcom, China Mobile, China Satcom, China Telecom, and China Unicom.
[ZTE Secures More than Half of China Unicom GSM Value-Added Service System 2008 Tender](_blank)
ZTE, 05 December 2008
ZTE began to release smartphones in the United States in 2011. The company elected to focus its efforts on low-cost products for discount and prepaid wireless carriers, including devices with premium features typically associated with high-end products, such as large high-resolution screens and fingerprint readers.
ZTE, 30 August 2006
ZTE, 8 December 2009
ZTE, 7 February 2007
In May 2016, ZTE became the co-sponsor of German club Borussia Mönchengladbach.
Since 2015, taking advantage of the league's appeal in China, several U.S. National Basketball Association teams have had sponsorship deals with ZTE, including the Houston Rockets (based in the home city of ZTE's U.S. subsidiary), Golden State Warriors, and New York Knicks.
Bribes for contracts
Norwegian telecommunications giant Telenor, one of the world's largest mobile operators, banned ZTE from "participating in tenders and new business opportunities for 6 months because of an alleged breach of its code of conduct in a procurement proceeding" during a five-month time span ending in March 2009.
Contracts with ZTE to build a broadband network for the Philippine government reportedly involved kickbacks to government officials.
[Arroyo suspends telecoms deal with Chinese firm] The project was later cancelled.
reuters.com, 22 September 2007
Surveillance system sale
In December 2010, ZTE sold systems for eavesdropping on phone and Internet communications to the government-controlled Telecommunication Company of Iran. This system may help Iran monitor and track political dissidents.
At least one ZTE mobile phone (sold as the ''ZTE Score'' in the United States by Cricket and MetroPCS) can be remotely accessed by anyone with an easily obtained password.
ZTE, as well as Huawei, has faced scrutiny by the U.S. federal government over allegations that Chinese government surveillance could be performed through its handsets and infrastructure equipment. In 2012, the House Permanent Select Committee on Intelligence issued a report recommending that the government be prohibited from purchasing equipment from the firms, citing them as possible threats to national security. A ban on government purchases of Huawei and ZTE equipment was formalized in a defence funding bill passed in August 2018.
Following the 2020 China–India skirmishes, India announced that ZTE would be blocked from participating in the country's 5G network for national security reasons. Sweden has also banned the use of ZTE telecommunications equipment in its 5G network on the advice of its military and security service, which said China is "one of the biggest threats against Sweden."
Category:Companies formerly in the Hang Seng China Enterprises Index
Category:Chinese companies established in 1985
Category:Companies listed on the Hong Kong Stock Exchange
Category:Companies listed on the Shenzhen Stock Exchange
Category:Companies in the CSI 100 Index
Category:Electronics companies of China
Category:Manufacturing companies based in Shenzhen
Category:Mobile phone companies of China
Category:Mobile phone manufacturers
Category:Networking hardware companies
Category:Telecommunication equipment companies of China
Category:Telecommunications equipment vendors
Category:Multinational companies headquartered in China
Category:Civilian-run enterprises of China
Category:Government-owned companies of China
Category:Electronics companies established in 1985
Category:Defence companies of the People's Republic of China