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After Telstra Dump ZTE, Who Will Win The New Contract?

As we exclusively reported Telstra has had no option but to pull the plug on ZTE the Chinese supplier of their house brand phones.

The big question now is who will pick up the lucrative contract?

Among those in the running is HTC, Alcatel and Motorola. Telstra said it was dropping ZTE because it couldn’t guarantee supply.

ChannelNews understands that the ZTE office in Melbourne could also go as ZTE races to cut costs following the decision by the US Federal Government to ban the Chinese Company from sourcing components and software for their smartphones.

Overnight ZTE said it had halted major operations, though employees at its Shenzhen, China, headquarters showed up to work as usual Thursday.

Concerns about ZTE’s ability to deliver shipments of smartphones, routers and other telecoms gear have heightened after the company’s announcement, which didn’t specify which operations were most affected. The telecoms firm has warned for weeks that it faces a fight for survival following a Commerce Department order banning American companies from selling to ZTE as punishment for the Chinese company violating a 2017 settlement to resolve its breach of U.S. sanctions against Iran and North Korea.

In Australia ZTE has been accused of overstating their sales numbers to research Company IDC.

The Company supply smartphones to Telstra, Woolworths and Target who are also Telstra resellers, along with eBay, two models are sold at Officeworks.

Investigations by ChannelNews earlier this year raised serious questions about the accuracy of the data in the last IDC mobile report after the US research group claimed that ‘Telstra branded smartphones (primarily manufactured by ZTE), dominate the low-priced prepaid space with 5.4% of the market.

Several brands said that this information was “not right”.

ZTE relies heavily on foreign components, particularly U.S. microchips for its smartphones.
Qualcomm supplied chipsets for 84% of phones shipped by ZTE in the first quarter, according to Canalys, highlighting the vulnerability of the global supply chain as technology firms get caught up in the escalating trade fight between the U.S. and China.

Telstra said its move to axe ZTE was a “difficult but necessary step given ZTE’s decision to cease major operating activities.” ZTE was the eighth biggest smartphone vendor in Australia, well behind other vendors, according to Canalys.

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