EU drops threats against Huawei, ZTE

The European Commission dropped its threat to launch an investigation into alleged illegal subsidies for Chinese mobile equipment manufacturers, in what will come as a relief to Huawei and ZTE--the two leading Chinese vendors operating in Europe.

The Commission previously said in March that it would no longer launch an investigation into alleged dumping by Chinese telecoms equipment companies. Taken together, the two decisions mean that the investigation into mobile telecommunications networks from China will no longer be pursued.

The settlement was reached following talks last week between Karel De Gucht, the European Union's Trade Commissioner, and China's Minister of Commerce Gao Hucheng at the EU-China Joint Committee.

"I am pleased that the EU and China have resolved the telecoms case. The EU pursues every opportunity to level out the playing field for our companies by engaging with our strategic partners including China. The concerns that have led us to launch the case last May can now be addressed in a systematic and regular dialogue between the two sides for the benefit of our industry," said De Gucht.

Huawei also welcomed the settlement, and reiterated that it strives to compete fairly in all markets where it operates.

"We believe that an open competitive environment is not only the foundation for the sustainable development of the ICT industry but also a major benefit to consumers who gain access to more advanced and innovative services at competitive prices," the company said in comments emailed to FierceWireless:Europe.

The Commission said in May 2013 that it was ready to launch an investigation over alleged dumping by, and subsidies for, Chinese mobile equipment manufacturers, even though European manufacturers were clearly not in favour of a probe.

In September 2013, the Commission was forced to deny a report that suggested it was delaying the investigation into the business practices of Huawei and ZTE until after European vendors had secured satisfactory slices of a massive TD-LTE tender launched by China Mobile.

Since then, Ericsson, Nokia Solutions & Networks and Alcatel-Lucent have all secured large network contracts in China after the country's three main mobile operators won TD-LTE licences and started naming vendor partners.

For their part, Huawei and ZTE continue to invest in Europe and see further growth in the region. In January this year, Huawei said it spent $3.4 billion (€2.6 billion) with European suppliers in 2013, and predicted the amount will continue to increase as the vendor expands its European presence.

The European Commission has previously noted that China exports telecommunication network equipment to the EU market with a value of just over €1 billion ($1.28 billion) per year.

For more:
- see this European Commission statement

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