ZTE wins one but loses one too – Italy contract bid falls through even as US restrictions start to ease
Losing the Italian bid is just the latest chapter in the ZTE saga, which is at the epicentre of a wider trade dispute between US and China
The Trump administration is letting ZTE Corp resume some business activities while the US weighs an end to a seven-year ban on the Chinese telecommunications equipment manufacturer.
The easing of restrictions didn’t come soon enough for ZTE’s bid to win a contract in Italy to supply wireless equipment to Wind Tre. ZTE lost the deal because it is barred from buying US technology, and Ericsson won the 600 million-euro (US$700 million) contract instead, people with knowledge of the matter said, asking not to be identified because it hasn’t been announced. ZTE’s shares in Hong Kong rose about 2 per cent on Tuesday.
The mixture of good and bad news is just the latest chapter in the saga of ZTE, which has seen its prospects and stock price rise and fall in the past few months over access to technology it needs to sell telecoms gear across the globe. The US imposed the ban against the Chinese company earlier this year, saying that it failed to comply with punitive measures imposed after allegations of lying about equipment sold to Iran and North Korea.
Still, the administration of US President Donald Trump has sought to ease restrictions on ZTE, which has become a bargaining chip amid rising trade tensions with China. Last week, the Shenzhen-based company appointed a new chairman as part of its agreement to clean house and pay a record US$1.4 billion fine to get back into business. The latest ZTE authorisation by the Commerce Department’s Bureau of Industry and Security is valid from July 2 until August 1.
ZTE is expected to be in compliance with US demands by August 1, a person familiar with the matter said.
Representatives for Ericsson and Wind Tre declined to comment on the Italy deal, which ZTE had originally won two years ago. Now, the Swedish telecommunications equipment maker has the multi-year accord to supply base stations for about 60 per cent of Wind Tre’s Italian mobile networks.