ZTE to increase US purchases to $9 billion over 3 years despite recent scrutiny

ZTE Corp, the world’s fifth largest telecom equipment vendor, plans to increase its purchases from the United States by around 10% annually to over $9 billion in the next three years, an executive said on Wednesday.


The increase in purchases comes at a time when ZTE (Shenzhen, P.R.C.), along with bigger Chinese rival Huawei Technologies Co Ltd (Shenzhen, P.R.C.), is under scrutiny of U.S. lawmakers and industry executives on security and subsidy issues.



ZTE Corp, the world’s fifth largest telecom equipment vendor, plans to increase its purchases from the United States by around 10% annually to over $9 billion in the next three years, an executive said on Wednesday.


The increase in purchases comes at a time when ZTE (Shenzhen, P.R.C.), along with bigger Chinese rival Huawei Technologies Co Ltd (Shenzhen, P.R.C.), is under scrutiny of U.S. lawmakers and industry executives on security and subsidy issues.


“We are collaborating with many U.S. companies and based on our current development plans in the United States, our initial estimate is we’ll increase U.S. purchases to $9 billion in 2012-2014,” said David Shu, a spokesman for ZTE.


Shu said the $9 billion number included $5 billion worth of deals already signed in February with U.S. chip firms Qualcomm Inc (San Diego, Calif., USA) and Broadcom Corp (Irvine, Calif., USA) over the next three to four years.


In the previous three-year period from 2009 to 2011, ZTE’s technology-related purchases in the United States was about around $7 billion, Shu told Reuters.


ZTE has purchased hardware and software worth $13.7 billion from U.S. technology companies since 2000, executives said.


China’s top telecom equipment makers Huawei, also the world’s second largest, and ZTE have made strong headway into emerging markets and Europe, but the U.S. telecoms market remains elusive on fears over possible cyber espionage.


Earlier in June, U.S. telecommunications equipment company Infinera Corp charged Huawei and ZTE of obtaining unfair government support and called for a tough U.S. response on economic and security grounds.


The House of Representatives Intelligence Committee also pressed the two Chinese companies to disclose their inner workings due to fears that booby-trapped technology could be supplied knowingly or unknowingly by the companies.