While its Chinese hometown competitor Huawei continues to fight to gain the trust of the U.S. government to win infrastructure deals in the U.S., ZTE is becoming resigned to the fact that it won't get anywhere in the market and therefore won't seek deals for core telecommunications network equipment with U.S. operators in the near term.
ZTE Chairman Hou Weigui said in an interview with Dow Jones Newswires that it won't seek equipment deals with companies such as Sprint Nextel (NYSE:S), AT&T (NYSE:T) and others. "Putting too much effort into this has no use. Last year we received a lesson" when the U.S. government essentially blocked ZTE (and Huawei) from winning an equipment deal with Sprint, Hou said. He added that ZTE has a growing business providing mobile devices to U.S. operators.
ZTE and Huawei have been the subject of suspicion among U.S. lawmakers concerned about national security. Earlier this month the U.S. Commerce Department decided to block Huawei from participating in the construction of a nationwide interoperable public-safety LTE network, citing unspecified national security concerns.
Sprint reportedly decided last year to block both Huawei and ZTE from getting its multi-billion-dollar Network Vision network modernization project because of mounting national security concerns from lawmakers and pressure from the Commerce Department. The concerns center on worries that Huawei's chips, routers and other equipment that could be bugged to give China's government access to sensitive information.
In the meantime, Huawei has tried to get access to the U.S. market through its device business, which is increasingly finding favor with Tier 1 carriers.
- see this Dow Jones Newswires article
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