EU Trade Commissioner Karel De Gucht will seek the backing of EU states to investigate Chinese telecom equipment makers Huawei and ZTE, even without a complaint from European manufacturers, EU diplomats said. The European Commission has been collecting evidence to prepare a possible case against Huawei and ZTE over state subsidies it says allows the companies to undercut European firms. EU trade investigations normally begin with a company complaint, but European manufacturers Ericsson, Alcatel-Lucent and Nokia Siemens Networks have refused to cooperate with the Commission because of fears that they could be shut out of the growing Chinese telecom market in retaliation, people familiar with the matter say. EU countries are divided in their approach to Huawei, with Britain and the Netherlands embracing the Chinese firm as a major job provider, while others are more wary of Chinese inroads into the telecom sector. EU member states are also concerned about national security issues. Last year, Germany excluded Huawei from supplying the infrastructure for a national academic research network. Huawei denies receiving unfair subsidies and maintains that its advantages are due to low-cost manufacturing and innovation. It says it complies with international laws and maintains that its products are secure.

ZTE, China’s second-largest telecom equipment maker, has essentially stopped doing business in Iran after a U.S. investigation into alleged sales of embargoed equipment, the company’s Chairman told Reuters. ZTE said in March last year that it would curtail business in Iran following a report that it sold Iran’s largest telecom firm a powerful surveillance system capable of monitoring telephone and internet communications. The company is now facing a U.S. criminal investigation over the issue. “We’ve basically stopped. We have to continue to service the products we had sold before – we have no choice,” Hou Weigui said in an interview in Beijing. “We maintain communication with them to enable locals to carry out maintenance.” Hou’s disclosure is the first public acknowledgement of how deeply the scrutiny has affected the company. While he declined to give details on the amount of business ZTE had done in Iran before, Hou said the compensation it had to pay clients there for breaking contracts, and the fact that it had to halt some shipments even after equipment had been manufactured, were important reasons for the company’s first-ever annual loss last year of CNY2.84 billion. Losses in Europe were also a big factor in the poor performance last year, he said. “I think we’ve really been treated unjustly on this issue. Others are selling the same things, and we weren’t even selling the most,” Hou said. “Now we face these restrictions, and others in the industry aren’t facing any restrictions – they’re all still selling. This is a bit unfair.” Hou said local rival Huawei Technologies was still doing business in Iran, but he declined to elaborate. Huawei repeated a statement it issued in late 2011 that it would no longer seek new customers in Iran and would limit business activity with existing ones, the South China Morning Post reports.

Huawei Technologies, the world’s No 2 telecommunications equipment maker, has slashed its long-term target for networking equipment sales to enterprises by a third, saying its earlier figure was too optimistic. Eric Xu, Huawei’s Executive Vice President and one of its rotating Chief Executives, said that the company’s enterprise division, which has been targeted for expansion as sales to operators turned sluggish, was now aiming to increase sales over the next four years to USD10 billion, well below the USD15 billion goal set last year. The division posted CNY11.5 billion in sales last year. He said that after assessing the market situation more closely, USD10 billion was a more realistic target. Huawei’s enterprise division, which contributed about 5% to total revenues last year, sells network equipment to companies. The firm’s carrier business, which accounted for nearly 75% of revenue, sells equipment to telecommunications operators. Its consumer group sells handsets and tablets to end-users and has been rising up the ranks of the booming smartphone market to compete with high-profile brands such as Apple and Samsung Electronics. Xu also said that Huawei expects its information technology business, which provides IT-related equipment and services to enterprises and telecommunications firms, to generate between USD800 million and USD1 billion in revenue this year. Eric Xu also added Huawei was “not interested in the U.S. market any more”, as U.S. security officials and politicians have repeatedly identified Huawei as a threat to U.S. national security – an allegation the Chinese company has consistently denied. Although Huawei has done business with 45 of the world’s top carriers, it failed to get contracts from any leading operators in the U.S. In October, a U.S. congressional report had officially branded Huawei and ZTE a threat to national security and advised U.S. companies not to buy their equipment, the South China Morning Post reports.

Eric Xu also said Huawei has no intention of being listed in the near future and would rely on organic growth as it has done in the past 25 years. As a private company, Huawei does not have enough funds for mergers and acquisitions (M&As), he added. He made the remarks during the 2013 Huawei Global Analyst Summit in Shenzhen. The company posted eye-catching results last year by achieving a 32% jump in net profit to CNY15.38 billion. Xu said he is neither optimistic nor pessimistic about the carrier networking business this year. “It is hard to say if the worst time for European telecom operators has passed. I expect a similar industry growth rate worldwide this year as that in 2012,” he said. Global spending on carrier infrastructure is expected to grow only 3.4% in 2013, according to Gartner Research. 4G projects in China are also unlikely to create a significant boost for Huawei’s revenue this year, according to Xu.

Smaller cities in China have shown the fastest growth in shopping through mobile devices. Third- and fourth-tier cities – those at county level – occupied the entire top 10 list with the highest frequency of mobile payment usage, according to Alipay.com Co, China’s biggest online payment company. Lhasa topped the list with 14.48% of Alipay users accessing the service via mobile devices. By contrast, Shanghai had a mobile payment ratio of 8.44% last year. Alipay represented 46.9% of the online payment market in the third quarter of last year. “The gap between big cities and small ones is narrowing in terms of internet coverage with the popularity of smartphones,” said Zhan Yongsheng, Manager of Lifestyle Services at Alipay. “Paying telephone charges while taking a bus, buying a lottery ticket while walking… these may probably be the most typical examples of mobile payment in small cities,” he said. Last year the number of people who used payment services through mobile devices more than tripled and the money they spent increased by 546%, according to Alipay. The number of transactions via mobile devices accounted for 9.2% of the total. First-tier cities, such as Beijing, Shanghai and Guangzhou, remain strongest in the sheer size of mobile payment. People in these cities spent an average of CNY128 on each payment via mobile devices, while those in third-tier cities spent CNY87. Taobao.com, China’s biggest consumer-to-consumer (C2C) online marketplace, said it had 300 million mobile users by the end of last year, which is close to the total population of the United States, compared with the 10 million mobile users it had in 2010. Zhejiang province, where Alibaba Group Holding is based, claimed nearly 15% of all online payments last year, followed by Guangdong province, Shanghai, Beijing and Jiangsu province, the China Daily reports.

Shoppers scanning QR-codes for discounts are getting exposed to malicious software. A growing number of people are reporting scams involving the codes, the black-and-white squares now seen on many advertisements. Instead of receiving a bonus, many people say they have fallen victim to crooks. Media in Shijiazhuang, the capital of Hebei province, reported that a woman had money wiped from her phone account after scanning a QR-code on an ad on the wall of a bus stop. The woman immediately received a text message saying she had been charged CNY100. Risks include corrupted privacy settings, identity theft, links to dangerous websites, and even viruses. No effective measures or rules have been released to control the growing misuse of the codes. More than 351,000 links contained in QR-codes were found to be dangerous and about 2,550 viruses were detected by the end of February, according to statistics from a Tencent antivirus program, which means 1.5 out of every 100 smartphone users may be attacked by a virus or access malware when scanning the codes. Some people have now become wary of using them. Li Yuxiao, Professor of Social Networks at the Beijing University of Posts and Telecommunications, advised mobile phone users to scan QR-codes from regular websites instead of from posters on the street or other sources, the China Daily reports.