Sweden banned Huawei or ZTE gear in their core networks and existing products from the two must be phased out before 2025.
Huawei and ZTE have slowed their 5G base station installations amid increasing uncertainty in the key component supply chain.
ZTE said that it had not yet been notified by the US government of the investigation and that the company is still ‘in normal operation.’
The firm faces ongoing US-China trade tensions and intense competition from other 5G players.
The move is a potential blow for rural US carriers that source cheaper gear.
Chinese carriers have a strong preference for homegrown players in their 5G rollouts even though Beijing has pledged “equal opportunities.”
ZTE was brought to the brink of collapse in April 2018 after a US government ban from buying American technology and components.
ZTE said it would continue focusing on its carrier business and is prepared for 5G commercialization.
ZTE is expected to build three cybersecurity evaluation centers in China, Belgium, and Italy this year, similar to the one that Huawei operates under the supervision of the UK government.
Private companies are also drawing back from close relationships with Huawei and ZTE.