NCSC advice to telecommunications sector about ZTE

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While a few reports say, the company might actually sell Android-powered devices outside of the U.S. as it comes with open source software.

The company's initial guilty plea was met with up to $1.2 billion penalties and fines, along with the dismissal of four senior employees, along with more fallout for lower level employees.

"We believe such a response could be similar across the entire USA component supply chain". This probation period has now been violated after the three instances of false statements were unearthed.

"This will be devastating to the company, given their reliance on USA products and software", said Jacobson.

ZTE "provided information back to us basically admitting that they had made these false statements", said a senior department official.

Second, management noted "immaterial exposure" to ZTE from both the core Viavi test and measurement unit and the Cobham side (we estimate 2% of revenue or less for both). ZTE did fire the four execs, but it failed to institute any punishment for those 35 employees.

While choking the ZTE supply chain is another step towards full-scale trade war between the USA and China, this is not the only PR battle being faced by ZTE.

NCSC advice to telecommunications sector about ZTE
NCSC advice to telecommunications sector about ZTE

Shortly after the order was issued, the National Cyber Security Centre also reached out to the United Kingdom's telecom entities saying that using any services or equipment provided by ZTE would be a national security risk.

"Mitigating the risk of external interference with equipment supplied by a particular vendor depends in significant part on telecommunications equipment being present from other vendors who are not subject to the same risk of external interference".

The U.S. government recently put pressure on telecommunications companies to stop buying Huawei networking equipment and consumer electronics products. "Adding in new equipment and services from another Chinese supplier would render our existing mitigations ineffective".

"The result would be an unacceptable national security risk to the United Kingdom telecoms infrastructure environment".

ZTE officials did not immediately respond to requests for comment.

The ban in the USA should not really come as a surprise to anyone as steps have been taken over the last few months to make it as unattractive, or illegal, to do business with Chinese firms.

Dolby is another American company that has partnered with ZTE in the past. "Many banks and companies even outside the U.S. are not going to want to deal with them", said Eric Hirschhorn, a former U.S. Undersecretary of Commerce who was heavily involved in the case.

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