Huawei plans legal challenge to latest US pressure: report

Chinese telecoms giant Huawei is preparing a legal counterpunch against new moves by American regulators to bar the company from accessing $8.5 billion in US federal funds for services and equipment, a report said Friday.

The Federal Communications Commission (FCC) last week branded Huawei and its Chinese rival ZTE as threats to US national security and blocked them from the fund.

It also proposed that other service providers be required to cancel or replace existing services and equipment from the companies. Huawei plans to file a lawsuit in the United States next week, The Wall Street Journal reported, citing unidentified sources.

A Huawei spokeswoman declined to comment but the company has invited AFP and other media to its headquarters in the southern city of Shenzhen next Thursday for an unspecified announcement.

FCC Chairman Ajit Pai said in a statement explaining the latest move that Huawei and ZTE "have close ties to China's communist government and military apparatus." In a statement last week, Huawei said the FCC decision was "based on selective information, innuendo and mistaken assumptions" and that blocking access to the fund will hurt American consumers.

The Universal Service Fund is used to subsidise telecommunication services and equipment mainly in rural areas of the United States, a market where Huawei gear has established a presence despite the growing US pressure on the company.