Huawei, ZTE deny allegations of illegal European subsidies

Huawei and ZTE (Shenzhen: 000063.SZ), China's two main telecom vendors, maintain recent media reports that suggest they got illegal government subsidies to gain an advantage over rivals such as Alcatel-Lucent (NYSE: ALU) and Ericsson (Nasdaq: ERIC) in Europe are false.

As reported by Reuters, a Financial Times article quoted a number of "unidentified" European Union representatives who said they had been collecting information on how the two vendors used subsidies to sell their platforms below cost throughout Europe.   

However, a spokesman for Karel De Gucht, the EU's trade commissioner, could not validate FT's report.

Although EU trade commissioners will be meeting in Brussels on Thursday, Huawei and ZTE said that the EU has not reached out to them about the report.

"We deny claims made in the media that Huawei employs dumping practices and has benefited from illegal state subsidies," Huawei said in an emailed statement.

ZTE also said it "receives no illegal or hidden subsidies, nor does it dump products in any markets where it operates."

Analysts believe launching an "anti-dumping" case could have consequences for other European vendors trying to gain a larger foothold in China's telecom market.

"If that happens, European vendors such as Ericsson and Alcatel-Lucent will have problems trying to sell equipment in China, which is a bright spot of global telecom spending now."

For more:
- Reuters has this article

In detail: Following the Packet Optical Transport Systems (P-OTS) evolution

Related articles:
Huawei makes stamp on 100G trend with Beltelecom network win
Huawei banned from making equipment bids on Australia's NBN
40G, 100G demand drove up DWDM market 19% in 2011