ZTE CEO apologises to customers as company gets three-strike warning

Image Credit: Flickr / Kārlis Dambrāns

The Chairman of Chinese telecommunications equipment maker ZTE apologised to the company's staff and customers after agreeing to pay the US a fine of $1bn to end the supplier ban which forced it to halt production

The deal will allow the firm to resume operations and rebuild trust with both its suppliers and its global clients though experts estimate it will take at least a month before ZTE is able to begin shipping phones again.

ZTE Chairman Yin Yimin apologised to employees, shareholders, business partners and customers in a memo sent out to staff, saying: 

“This issue reflects problems that exist with our firm’s compliance culture and at management level. The activation of the denial order has caused huge losses for the company. The firm has paid a disastrous price.” 

The terms of the deal specify that ZTE will change its board and management within 30 days, pay a $1bn fine and put an additional $400m in escrow. A new 10-year ban that is suspended unless there are any future violations was also included in the deal. 

White House trade adviser Peter Navarro publicly warned the company that it would be “shut down” in the US if any more violations occurred, saying: “It’s going to be three strikes you’re out on ZTE. If they do one more additional thing, they will be shut down.”   

ZTE has a difficult path ahead as the company must now work to regain the trust of its US customers while avoiding any additional scrutiny from US officials. 

Image Credit: Flickr / Kārlis Dambrāns