Huawei facing more strife in Europe after report Germany is considering a ban on Chinese gear in its 5G networks

Germany’s Interior Ministry has proposed measures that would force local telecoms operators to remove critical components from Chinese suppliers
If proposal is agreed, it would represent a major shift by Germany, which rejected pressure from the US four years ago to ban Huawei

Huawei

Iris Dengin Shenzhen

Published: 7:28pm, 28 Sep 2023

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Telecommunications gear giant Huawei Technologies is facing growing trouble in Europe, with Germany becoming the latest country to consider a ban on Chinese manufacturers in its 5G networks.

Germany’s Interior Ministry has proposed measures that would force local telecoms operators to remove critical components from Chinese suppliers from their networks, including Huawei and ZTE Corporation by 2026, according to a report by Reuters last week that cited a government official familiar with the discussions.

If the proposal is agreed, it would represent a major shift by Germany, which rejected pressure from the US four years ago to ban Huawei. Several other countries in the region, including the UK, Denmark, Sweden, Estonia, Latvia and Lithuania, have already banned Huawei from their 5G networks.

In a radio interview with German broadcaster ARD earlier this month, Carsten Senz, vice-president of corporate communications at Huawei Germany, said that German consumers have been using the company’s technology for many years without encountering any security problems.

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“Like all the other equipment providers or suppliers, Huawei has no remote access at all to the data in mobile networks … Only the network operators have that. In other words, the networks are under the complete control of the German network operators,” Senz said in the interview.

In a statement to the South China Morning Post, Huawei said it “opposes pure politicisation of cybersecurity assessment” and warned that a ban would result in higher costs for Germany’s telecoms operators as well as consumers.

The EU has also called for more member states to block Huawei from their 5G networks. In 2020, Brussels recommended that member states ban or restrict Huawei in their 5G telecoms networks, but only one third of EU countries have followed through, the EU’s internal market commissioner Thierry Breton told the Financial Times in June.

In Germany, Europe’s biggest economy and China’s largest trade partner in the EU, 65 per cent of 5G telecoms equipment was made by Huawei, according to data by Janka Oertel, director of the Asia programme at the European Council on Foreign Relations.

Huawei has been involved in Europe’s 5G roll-out from the beginning. In 2019, nearly 60 per cent of the company’s 50 global 5G commercial contracts were signed with European operators.

However, the continent has faced increased pressure from the US after Washington put Huawei on a trade blacklist in 2019 on national security grounds. This was followed by a series of moves including bans on the use of Chinese 5G technology in the US, as well as trade restrictions that cut the firm off from advanced chips.

Washington has been lobbying its allies to join the US boycott of Chinese 5G technology, with Five Eyes countries including Canada, Britain, Australia and New Zealand following suit in banning the Chinese firm in their 5G networks.

Apart from Germany, Portugal is also looking to ban some Chinese 5G gear, in a potential policy U-turn, according to a recent Financial Times report.

China’s foreign ministry spokeswoman Mao Ning said at a press conference last week that China opposed “any country’s politicisation of economic, trade, science and technology issues”, and the Chinese embassy in Berlin told Reuters that the country will not stand by idly if Germany proceeds with the ban.

While privately-held Huawei does not disclose a detailed revenue breakdown in its financial results, it said sales in the Europe, Middle East, and Africa (EMEA) region grew 13.5 per cent to 149 billion yuan (US$20.9 billion) in 2022, which accounted for nearly a quarter of total revenue.

Before the US sanctions, the EMEA region contributed 204.5 billion yuan, or 28.4 per cent of its total revenue, in 2018.