Huawei Strikes German 5G Deal Despite Political Pushback
December 11 2019 - 11:19AM
Dow Jones News
By Sara Germano
BERLIN -- Huawei Technologies Inc. secured a commitment to build
part of Germany's 5G infrastructure, strengthening its position in
Europe's largest economy despite calls from lawmakers to bar the
Chinese company.
Telefónica SA, one of three major mobile operators in Germany,
said Wednesday it planned to use equipment from Huawei and
Finland-based Nokia Corp. to build its 5G network in the country --
subject to Huawei equipment being certified for use.
" Telefónica Germany has clearly taken care not to pre-empt the
ongoing political process of defining these security guidelines and
at the same time not to delay the start of the 5G rollout," said
Klaus Schulze-Löwenberg, a spokesman for the company.
Both Nokia and Huawei will be "equally responsible" for
supplying equipment for 5G antenna technology as part of this
decision, while Telefónica Germany plans to select vendors for the
more sensitive core network sometime next year.
It is the first public commitment toward the use of Huawei
equipment for 5G by one of Germany's three main mobile network
operators, which also include domestic leader Deutsche Telekom AG
and Vodafone Group PLC.
The decision comes amid political quibbling in Germany over
whether to allow Huawei to supply components for mobile networks or
to ban it, as the U.S. has demanded. The government recently
decided against explicitly barring Huawei. Critics of the company
are concerned it could be a vehicle for espionage by the
Chinese.
But lawmakers from Germany's ruling coalition have pushed back
and threatened to amend the nation's telecommunications security
laws in a way that would exclude the Chinese vendor. Timing of a
parliamentary vote on the updated security regulations is unclear
but expected soon.
At the annual convention of Chancellor Angela Merkel's Christian
Democratic Union last month, members adopted a nonbinding motion to
exclude 5G network bids by foreign equipment makers that could be
subject to influence from their governments -- which applies to
Huawei.
Deutsche Telekom says it is waiting out the political quarreling
before signing any new equipment deals. "In view of the unclear
political situation, we are not currently entering into any 5G
contracts with any manufacturer. We informed the manufacturers
about this last week," a company spokesman said in a statement. "We
hope, however, that we will get political clarity for the 5G
expansion in Germany as soon as possible, so as not to fall
behind."
Huawei has said that it would be willing to sign a no-spy
agreement and welcomes regulatory scrutiny both in Germany and
elsewhere. The Chinese company is already a major supplier to all
three network operators in their existing infrastructure, and a
company spokesman said this week that efforts to build out
Germany's 4G network are continuing.
Operators in Germany have lobbied against banning Huawei, saying
it would push up the cost of building the 5G network and delay its
deployment.
Write to Sara Germano at sara.germano@wsj.com
(END) Dow Jones Newswires
December 11, 2019 11:04 ET (16:04 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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