Out-of-business-uk-sign-on-chair
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).
Advertisement
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.