ZTE sells surveillance systems business

Telecom Lead Asia: ZTE has exited from surveillance systems business by selling 68 percent stake in its subsidiary.

The Chinese ICT equipment maker and solutions provider is under fire in the United States over cyber security concerns.

Shenzhen-based ZTE sold its 68 percent stake in ZTEsec to 10 Chinese investment companies including Shenzhen Capital Group.

The sale, worth between $57 million-$70 million, will enable ZTE to focus its resources on its principal businesses in line with the requirements of its strategic development.

ZTE took the decision to sell ZTE Special Equipment (ZTEsec) on September 21, during a US Congressional committee investigation into ZTE and its rival Huawei Technologies.

According to the US Intelligence committee, Huawei and ZTE should be kept from the US market and told US companies to stop doing business with both firms.

ZTEsec’s customers include law enforcement and agencies focusing on criminal groups and terrorists which disseminate hostile messages, communicate and share information that endangers national security and safety of people’s life.

Reuters reported that China’s military, police and telecom carriers are its key customers, citing ZTE’s English language site.

ZTEsec has showcased its security products at several international trade shows, offering products to government and law enforcement officials that it said could detect passwords of popular webmail services from Yahoo and Google, filter out anti-government Internet traffic, capture cellphone data, tap phone calls and mine troves of intercepted data.

Recently, TelecomLead.com reported that ZTE, as part of focusing on profitability, is planning to shut down nonviable offices in different telecom markets. ZTE will eliminate offices that record loss for a long time with limited prospect of a turnaround. It will also consolidate products that offer little development potential. Exercise headcount control and conduct organizational change is also in the pipeline.

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