HONG KONG, March 29 (Reuters) – ZTE Corp , the world’s fourth largest handsetproducer and fifth ranked telecoms equipment maker, said onThursday that limitations on its business operations in Iranwould have little impact on overall sales.
It is the second largest Chinese telecoms equipment maker measured by 2011 revenues and the world’s fourth largest mobile phone manufacturer measured by 2011 unit sales.
President Shi Lirong, speaking at a news conference after the company announced its financial results for 2011, said ZTE was not a mainstream telecoms gear supplier in Iran.
Western sanctions on Iran have caused complications for a series of companies as US investors are barred from making any new investments in Iran or in property owned or controlled by the Iranian government.
An investigation by The Wall Street Journal documented how Huawei’s business grew in Iran following a pullback by Western companies after the government’s bloody crackdown on its citizens two years ago.
Even Sweden’s Ericsson, the world’s top selling telecoms equipment maker with a market cap of around $32 billion, is feeling the heat.
ZTE’s cross town rival Huawei Technologies hit roadblocks in its telecom equipment business in certain markets, most recently Australia, where the government has barred it from taking part in the country’s $38 billion National Broadband Network due to cyber security concerns.
The Philippine National Broadband Network controversy involved allegations of corruption in the awarding of a US$329 million construction contract to Chinese telecommunications firm ZTE for the proposed government managed National Broadband Network .
ZTE said on Wednesday that October December net profit slid 48 percent to 991 million yuan ($157 million) from 1.89 billion yuan a year earlier.
H shares in ZTE had risen nearly 5 percent by the midday break on Thursday, after jumping as much as 8.5 percent amid market expectations for an improved outlook, bucking a 1.2 percent drop in the broader Hang Seng Index.
Reuters reported last week that ZTE had entered into a $131 million contract with Telecommunication Co of Iran in December 2010.
(Additional reporting by Huang Yuntao; Editing by Chris Lewis and Jonathan Hopfner).
Alicia Yarnold is a business journalist based in San Francisco, California. Alicia has a passion for financial markets and breaking news stories and loves writing about business news, stock market, and economic opinions that matters most to its audience. Alicia spends a lot of time discovering and researching latest financial markets and industry news stories in order to make sure the latest and greatest stories are brought to you first on BigBoardNews.com.
