ZTE proposes third-party validation

WASHINGTON -- Chinese telecom company ZTE has proposed third-party validation to relieve national security concerns, says a ZTE executive.

"We will partner with an independent third party, a kind of laboratory, to validate ZTE's products including hardware and software," Dai Shu, vice director of ZTE's Corporate Branding and Communication Department, told Xinhua on Tuesday.

"This independent third party or laboratory will be under the oversight of the US government," he added.

The US House Intelligence Committee released a report on Monday claiming that ZTE and Huawei, another China-based telecommunications company, pose a threat to US national security by providing equipment and services to US critical infrastructure.

The solution ZTE has proposed is also known as Trusted Delivery Model, which is also mentioned in the hearing held in September in front of the committee.

But the House report dismissed the effort and still recommended that US government computer systems and private companies exclude any equipment from the two firms.

It also urged the Committee on Foreign Investments in the United States to block acquisitions, takeovers, or mergers involving the two companies. But the 52-page report failed to give concrete evidence.

"We feel disappointed, because the committee ignored ZTE's efforts regarding how to solve the issue. ZTE could have provided a very affordable network in the United States without any threat to national security," said Dai.

"We still hope that the US government can give us a fair opportunity to be involved in the national wireless or broadband network construction," he added.

He stressed that ZTE poses no threat to US national security, noting that the company has already cooperated with more than 500 carriers in more than 140 countries without any security complaints.

The US report ignored the benefit ZTE has brought to the US economy, he said. "Over the past 10 years, ZTE has already purchased more than $14 billion products from Qualcomm and some other vendors in the United States."

The company has directly or indirectly created more than 20,000 jobs in the United States through investment and purchases, he said.

It seemed the report was prepared in a hurry, said Dai. "Generally speaking, a lot of allegations in the report are baseless or groundless with regard to the connection between the company and the Chinese government."

"It is not fair just to select Chinese vendors for investigation," Dai pointed out. "It needs the whole supply chain, the whole industry to be involved. Other Western vendors should be also included."

The allegations would have little impact on ZTE's business plan, said Dai. The report only limited their market access in the telecom infrastructure market and left the terminal devices market open, he explained.

Ninety percent of ZTE's business is in the terminal market and less than $30 million of revenues come from infrastructure, said Dai. "However, the report generated misunderstanding and confusion."

ZTE had already experienced difficulties in the infrastructure market, said Dai.

Two years ago ZTE had a good chance to win a contract with US telecom company Sprint, but it was in the end excluded in the development of Sprint network due to political reasons, he said.

"Since then, ZTE has been clear it is very difficult for ZTE to provide a nationwide wireless network solution to tier one operators such as AT&T, Verizon, Sprint and T-Mobile," he said.