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ZTE Post US$1B Loss After US & Telstra Blow

Chinese telecommunications company ZTE has reported a net profit of 276 million yuan in Q4 as it recovers from U.S. sanctions which cost the company an overall 2018 loss of 7.0 billion yuan (US$1 billion).

The news follows Telstra replacing ZTE ‘white label’ devices with Alcatel products after the US’s (temporary) ban.

Despite this, ZTE has reportedly pitched to roll out Telstra’s 5G network before Australia banned it – along with Huawei – from building the 5G network in this country.

The company reported full-year 2018 revenues of 85.5 billion yuan (US$12.7 billion), down 21.4% year-on-year, and an expected net loss of almost 7 billion yuan (US$1 billion), versus a net profit of 4.55 billion yuan in 2017.

Following the implementation of U.S. sanctions, the world’s fourth-largest telco was shackled to the point it had to stop most business efforts and nearly going to administration.

ZTE paid a US$1.4 billion penalty to lift these sanctions and placed a further $400 million in escrow leading to its worst half-year loss report of 7.8 billion yuan.

Despite the big losses, ZTE says it is on track to turn a profit, thanks in large part to its heavy investment in 5G research and development.

ZTE was among the first companies to introduce a 5G smartphone, its flagship Axon 10 Pro 5G handset revealed at MWC 2019, not expected to land in Australia until our 5G network has matured.

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