Report: EU report accuses Huawei, ZTE of competing unfairly in mobile gear

Chinese networking vendors Huawei Technologies and ZTE are competing unfairly in the European mobile infrastructure market, according to an analysis being circulated by the European Commission, The Wall Street Journal reported on Friday.

The analysis said the two companies receive preferential financing from the Chinese government, which gives them an unfair advantage against European mobile equipment companies, the newspaper reported. The Journal said it had reviewed a copy of the analysis, which was being circulated among national governments.

The European Commission is the executive branch of the European Union. Officials are now trying to decide whether to launch a full investigation of the Chinese companies, at the risk of setting off a trade war with China, the article said.

Financing plays an important part in the mobile infrastructure business, which involves massive network deployments on the promise of future services revenue.

Telecommunications vendors have cited Huawei and ZTE as among the forces driving down mobile equipment prices over the past several years. The two companies, especially Huawei, have faced political opposition in the U.S. that has hurt their attempts to win large contracts with U.S. carriers. A congressional committee charged earlier this year that products from the two companies could expose vital U.S. infrastructure to cyberespionage or cyberattacks.

Stephen Lawson covers mobile, storage and networking technologies for The IDG News Service. Follow Stephen on Twitter at @sdlawsonmedia. Stephen's e-mail address is stephen_lawson@idg.com