Posts tagged discriminating
ZTE Corp, the Chinese supplier of telecommunications equipment, is being denied the American Dream in the US, said its top executive for the region.
“Because of miscommunications and misperceptions of politicians in the US, we believe that ZTE is not treated fairly in this marketplace,” Lixin Cheng, chief executive officer of ZTE USA, said in an interview.
ZTE, based in Shenzhen, China, makes mobile phones, data cards and infrastructure for wireless networks. It has boosted revenue in many markets by offering advanced technologies at low prices. To tap into the growth opportunities in the U.S., the company has invested in the latest wireless technology, what’s known as fourth-generation, or 4G, equipment.
Still, US government officials are limiting ZTE’s growth, Cheng said, by treating the company with suspicion and lumping it together with Huawei Technologies Co, which has drawn congressional scrutiny for its efforts to expand in the country. ZTE USA hires more than 80 percent of its staff from the US and has encouraged foreign investment, he said.
“No matter where you come from as a person, if you act locally and follow the law here, you have an equal opportunity to become successful,” Cheng said. “That’s what ZTE wants.”
A report this month by the US China Economic and Security Review Commission, an independent 12-member panel that advises Congress, indicated that Chinese telecommunications companies may be conscripted into plans for interfering with or gaining intelligence from the US wireless networks.
The commission said that the majority of ZTE’s shares appear to be owned by government entities and called the company a “quiet giant,” supplying handsets to Western companies often without using its own brand.
“Along with other technology equipment, as the manufacture of mobile-phone handsets and associated software moves to offshore outsourcers, security could be compromised,” the report said. “Although there are no readily available case studies where this has actually happened, there is a potential risk of jeopardizing one of the most widely used forms of communications in the United States.”
Last fall, US lawmakers asked the Federal Communications Commission to review the security risks of domestic companies such as Sprint Nextel Corp. using equipment from ZTE and Huawei. Sprint ultimately ordered gear from other suppliers.
ZTE may have legitimate concerns about being stymied by politicians in the US market, said Daryl Schoolar, an analyst at Current Analysis in Phoenix. Still, ZTE has other challenges too, including a language barrier and established competitors such as Ericsson AB and Alcatel-Lucent SA.
“They’re still perceived as a smaller, wireless infrastructure player,” Schoolar said. “Verizon or Sprint or AT&T, when they make these decisions on networks, we’re talking billion-dollar decisions, and they tend to go with companies they already have a relationship with.”
ZTE is winning share of the global market for its devices and network equipment, according to researcher ISuppli. The company was the fourth most popular mobile-phone brand in the second quarter, supplanting Motorola Mobility Holdings Inc. and Sony Ericsson Mobile Communications AB by percentage of total units shipped. ZTE also ranked fourth in mobile infrastructure sales worldwide, with 11 percent of the market in the first half of the year, according to ISuppli.