Broadband Operators in the UK Watch Nervously as DZS Falls Over
The chances are reasonably good that quite a few of our readers won’t have heard of the name DZS (DZSi / Zhone) before, but they’re a supplier of fibre optic networking kit to a number of broadband operators in the UK, USA and elsewhere across the world. Why is this relevant, you ask? This week, they “commenced a liquidation proceeding“.
DZS formally commenced a liquidation proceeding under chapter 7 of the United States Bankruptcy Code on 14th March 2025, which occurred after the company said they had been “unable to secure the necessary working capital from either its current lender or any prospective lenders to sustain the business going forward.”
The situation is worrying because a number of alternative network providers in the UK make use of the kit that DZS produce, such as for things like Optical Network Terminals (ONT) inside homes and offices. But we don’t think the current issue extends to the OLT business, which now largely falls under Dasan after it was spun out in 2024 (even though some of this kit still uses the DZS branding).
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According to the announcement, foreign subsidiaries of DZS, including those in Germany, the United Kingdom, and Australia, “may continue to exist” outside of the United States liquidation. Despite this statement, the company is still in the process of appointing a Chapter 7 Trustee to “control the liquidation process in the United States and evaluate how to proceed with foreign subsidiaries and affiliates“.
DZS Statement
Subsidiaries and affiliates outside of the United States will experience near term business disruption with day-to-day operations, which will include various IT (i.e., outlook/email), and other software programs. Please be patient as the Trustee assesses the situation and the manner in which to proceed, whether it be a going concern sale, administration under applicable local law, orderly liquidation or some other path.
During the Company’s 25 years, Zhone/DZS developed industry leading broadband access and connectivity solutions that today enable high-speed, secure and reliable internet access services to many service providers around the world.
Over the past nearly two years, the Company has been balancing its technology initiatives while optimizing operating expenses and securing the necessary working capital to stabilize the business. Please know that the Company has been working with extreme urgency to obtain a new working capital facility that would maintain the business and has otherwise been evaluating all possible strategic alternatives. Unfortunately, we have not been successful in those efforts.
As a result of the Chapter 7 asset liquidation process, the Company is hopeful that its market-leading broadband access, connectivity and cloud software solutions are acquired, and customers and suppliers are restored.
Suffice to say that altnets using related kit will be watching developments closely and considering their options. The hope is that DZS may either find a way to continue their UK business or secure a sale to somebody else, otherwise some network operators may need to consider replacement.
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook, BlueSky, Threads.net and Linkedin.
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Does anyone know how widely their equipment is used in the UK?
It is a shame we can’t produce this stuff in the U.K, I am pretty sure we have the know how and knowledge.
Time we stopped relying on foreign companies for our infrastructure, certainly when it is Chinese or American.
i know it is not going to happen, but it would be nice.
Your idea and trump’s idea seems a good one at first but we would take technology for instance back 20 years and cause higher prices for said products.
What we do need instead is less pinch points like in the above situation and tsmc.
will you be prepared to pay more for it? your beloved cheapskate altnets are already mostly financial basketcases – they won’t be able to bear the cost, not without huge price rises.
We design and make 2G/3G/4G/5G radios here in the UK, and also deploy them on our UK network. There are plenty of brilliant young engineers out there but few companies like ours who make things from the ground up. We also need to get this culture into schools. Creation not consumption – this is what built the greybeards of today, mainly as there wasn’t much to consume so we created it!
Our biggest problem is scale, we will never be an Ericsson, Nokia or Huawei and simply cannot compete like for like on pricing. I fear this is what drove this company into the ground.
In an ideal world, stuff like this would be fully Open Source (both hardware and software).
@BT Ivor – most altnets use XGS-PON kit from Adtran, Nokia or Calix, none of them are cheapskate suppliers.
There is the cheapskate incumbent that used a lot of G-PON fromHuawei and Nokia until recently 😉
Ok so Adrian’s beloved altnet did go for Iskratel OLTs which are low cost low spec devices.
The main user of DZS in the UK for PON appears to be the other incumbent KCOM. Grain were also reported to be using their kit kit for Point to Point Ethernet.
Sadly when the UK could and wanted to Big Business forced the UK government to stop
see
https://www.techradar.com/news/world-of-tech/how-the-uk-lost-the-broadband-race-in-1990-1224784
And where all that development be taken advantage of? We (the UK0 doesn’t even the IPR! The could have had a 10 year lead on the rest of the world.
Cheers, Anon.
BT Ivor don’t like the Altnets as they are taking business away from his beloved BT and Openreach, so his shares are going down. What he forgets is that the whole network was sold for pittance. Sure they have now had to renew the network, but for years, it has been crumbling, and they for years they have been charging sky-high prices and doing nothing to it, until they had not choice.
My phone cable was supposed to have been replaced or sorted over 20 years ago, but nothing have been done to it, how I even got ADLS/FTTC is a miracle.
He says my beloved Altnet, not really beloved, if he remembers I was never interested in going to FTTP, i was fine with what I had, it was plusnet who tried to pus me to the Openbreach FTTP network and would not give me a decent offer on FTTC that forced me to an Altnet, also 12 months contract instead of 24.
As you say, the technology they use is not cheapskate, unlike Openreach who still don’t offer symmetric network.
It is good that we have other networks, Openreach and BT have had things too good for too long, yeah, sure they have had restrictions, but they still make millions, so it has done nothing to stop them growing to be the monster they are.
As for producing things in our country, I do know the problems of doing so, that is why I said it is a shame we don’t.
It is time we stop relying on other countries, I know that it is not possible for everything, but it would be nice if we could produce more here.
We even need China to build our Nuclear power stations for crying out loud, a bit of a security issue I think.
I just to try and support the smaller companies or ones that do something different, not saying that Zzoomm is small, I know it is supported by a large American company, but then again, BT is not really British these days, even if it has British in it’s name
I think we should have Dark fibre laid and it should be taken over the by the government, not by a company, but then, I never agreed with Electric, gas and Water being privatised either. We the consumer pay the higher prices to keep these companies going, only have to look at Thames water and people have been paying sky-high prices to keep BT going for years.
Oh BT Ivor, talk about misinformation
I think if you have access to an ALTNET in your area, we should all crowd fund a connection for you so you can experience the sheer joy of an ALTNET connection, with it’s beautiful symmetric speeds, it’s ultra low latency and UK Support contrasted with BTs legacy, out dated asymmetric GPON contended technology.
BT are not leaders in this stuff anymore, they barely follow others. They’ve fallen by the way side. They are only where they are because of time and near monopoly over infrastructure that was sold to them way cheaper than it cost the tax payer. If they were leaders, we’d be hearing about 50PON etc not excuses about whether demand whilst some small Altnets just get on with it. BT are the people who told us FTTC would be all we needed as nobody needed higher speeds and they couldn’t see demand for decades. Then, credit to Virgin Media at the time, they invested in faster products and customers flowed to them in those areas.
Sounds like the classic: MBA got in there, spun off a profitable slice of the company for short term profit, took their payout and moved on to the next victim while the zombie company staggers along for a few more years before collapsing. A tale as old as time!
don’t forget loading up the company with debt too a la Asda or Thames Water.
Can’t see Huwawei becoming unavailable, unless the Government stepped in!
The CCP has already ‘stepped in’.
Oh yes Huawei. Did you hear that BT Ivor?
BT still got lots of Huawei kit in green cabinets around the UK. Cheapskates 🙂
Mond you, it did work a lot better with FTTC than ECI kit that was always plagued by issues as detailed on this site throughout the years.
A statement is required from our BT Shareholder Ivor though, on why BT invested in cheapskate kit???
I don’t see this a a big issue, yes there will be short term issues but most of these things are interchangeable so these altnets will just turn to Nokia, telese, ciena or technetix.
Plus, won’t be surprised if the owner of technetix buy them up.