Another round of headaches for Chinese telecom equipment makers Huawei and ZTEafter previously facing scrutiny over security concerns in the U.S., the two companies are now being targeted by the European Commission. The European Union's executive body is seeking to investigate Huawei and ZTE for undercutting European firms by receiving state subsidies, and wants the backing of EU states to move ahead even without a complaint from domestic manufacturers, according to sources cited in a Reuters report.
Reuters reports that European manufacturers Ericsson, Alcatel-Lucent, and Nokia Siemens Networks have refused to cooperate with the Commission or file a complaint because they fear being shut out of the lucrative Chinese telecoms market. In turn, Huawei has denied receiving unfair subsidies and says it complies with international laws and does not engage in espionage. Huawei is the world's second largest telecom gear maker after Ericsson.
According to the report, EU Trade Commissioner Karel De Gucht intends to move ahead and bring up the issue with EU trade ministers at a meeting in Dublin this week. An internal EU report last year recommended that EU take steps to limit the growth of Chinese telecoms equipment maker, citing competition against domestic companies as well as threats to security.
The Commission's complaints are similar U.S. concerns about the Chinese companies. Last month, Sprint Nextel and SoftBank pledged not to use gear from Huawei if they merged, though that tie-up is now uncertain after Dish Network launched a $25.5 billion bid to compete with SoftBank's previous offer of $20.5 billion. Huawei recently said that its U.S. growth prospects will be hindered this year by U.S. security concerns after a U.S. congressional report last October found that U.S. national security interests could be undermined if Huawei and ZTE provide gear for critical infrastructure.
But EU companies have not taken a unilateral stance. In Britain, Huawei has been subject to scrutiny by the government over security concerns, though the company is also seen as a major job provider both there in the Netherlands. Germany, however, stopped Huawei last year from providing infrastructure for a national academic research network.
Huawei Technologies is a leading telecom solutions provider. Through continuous customer-centric innovation, they have established end-to-end advantages in Telecom Network Infrastructure, Application & Software, Professional Services and Devices. With comprehensive strengths in wireline, wireless and IP technologies, Huawei has gained a leading position in the All-IP convergence age. Their products and solutions have been deployed in over 100 countries and have served 45 of the world's top 50 telecom operators, as well as one third of the world's population. Huawei...
ZTE is a leading global provider of telecommunications equipment and network solutions. Founded in 1985, ZTE Corporation has been listed as an A-share company on the Shenzhen Stock Exchange since 1997. In December 2004, ZTE was successfully listed on the Main Board of The Stock Exchange in Hong Kong, becoming the first Chinese company to hold both A shares and H shares. Currently, ZTE is the telecom equipment provider with the most market capitalization and revenue in Chinaâs A...