ZTE chairman Yin Yimin has apologized to 80,000 staff and its customers on Friday after the Chinese technology firm agreed to pay a $1 billion fine to the United States to settle a 7-year ban on sourcing tech components from America, Reuters reported.
As part of the settlement, ZTE needs to remove the board and top management team within one month. The new deal also includes a new 10-year ban that is suspended unless there are future violations.
The ban blocked China’s second largest telecoms equipment maker by revenue from buying the U.S. components to make phones and telecom equipments that go into mobile network of operators. Qualcomm and Google are some of the suppliers of ZTE.
Yin Yimin, in a memo to staff, said ZTE will look to get back into business as soon as possible, and hold those responsible for the breach accountable.
“This issue reflects problems that exist with our firm’s compliance and at management level,” Yin Yimin wrote, adding the incident was caused by the mistakes of a few ZTE leaders and employees.
ZTE chairman said the U.S. ban had caused huge losses for the company which had been forced to pay a disastrous price.
ZTE earlier said it has generated 43 percent of its revenue from the overseas telecom markets including 25 percent from U.S, Europe and Oceania in 2017.
The company’s R&D expenditure was RMB 12.96 billion in 2017, covering 11.9 percent of its revenue. ZTE has more than 4,500 R&D professionals for 5G. It annually invested around RMB 3 billion in 5G wireless R&D.
ZTE owned over 69,000 global patents, with more than 30,000 granted worldwide, including over 1,700 patents for 5G strategic deployments globally in 2017.
ZTE has bagged more than 320 LTE/EPC contracts globally and entered 80 percent 4G-deployed countries. ZTE deployed over 110 Pre-5G networks in around 60 countries till the end of 2017.
ZTE pleaded guilty to conspiring to evade U.S. embargoes by buying U.S. components, incorporating them into ZTE equipment and illegally shipping them to Iran, paying nearly $900 million in fines. The latest sanction in April was because ZTE lied about disciplining some executives responsible for the violations.
