Wed, Dec 12, 2018 - Page 9 News List

Europe was already growing wary of Huawei

By Birgit Jennen, Thomas Seal and Helene Fouquet  /  Bloomberg

The shock arrest of Huawei Technologies Co (華為) chief financial officer Meng Wanzhou (孟晚舟) comes at a crunch time in Europe, as governments decide whether to crack down on the Chinese technology giant.

Before Canadian officials detained Meng on Dec. 1 over potential contravention of US sanctions on Iran, officials from Britain, Germany and France were becoming increasingly wary of the telecom equipment maker, people familiar with the matter said.

Amid concerns of an escalating US-China trade dispute, Washington has been bringing allies onside over its long-standing fears that Huawei’s equipment could enable Chinese spying.

While Australia and New Zealand in the past few months barred Huawei’s equipment from next-generation telephone networks, Europe has yet to take decisive action.

Europe, where 5G networks are to be rolled out starting next year, is a key battleground for Huawei as its largest market outside Asia, where the company has spent more than a decade notching up contracts with the likes of Deutsche Telekom and Vodafone Group.

“Companies are making their decisions about their core network technology,” technology analyst CCS Insight chief of research Ben Wood said. “Those are decisions which are implemented and then sustained for a decade, so this is a very, very important crossroads for Huawei and these kind of moves are very unhelpful, the fact that this has all blown up at this time.”

In Britain, Huawei has come under increased government scrutiny since a cybersecurity oversight board in July said that it could no longer guarantee the company’s equipment does not compromise national security.

British telecom BT Group has begun to remove Huawei gear from the core of the EE mobile network it acquired two years ago and this week Huawei agreed to demands from British security officials to address risks in its software and equipment as it tries to avoid getting banned as a 5G supplier, a person familiar with the matter said on Friday last week.

Germany’s coalition government also has concerns about letting Huawei supply 5G equipment, people familiar with the matter said.

Officials are looking at potential changes to rules or standards that would affect Huawei, although it is controversial within government, said the people, who asked not to be identified as the deliberations were private.

A representative for the German Federal Ministry for Economic Affairs and Energy declined to comment.

One German lawmaker, who attended a recent briefing by US officials advocating against Huawei, said that any action on the matter should wait until after the nation’s 5G airwaves auction finishes next year and the licenses have been awarded.

Germany currently has no legal basis to partially or fully exclude Huawei from supplying 5G equipment.

“Germany and the EU should not jump on [US President Donald] Trump’s campaign against China,” said Katharina Droge, a Green lawmaker responsible for trade. “Nevertheless, it is in Germany’s own interest to take the concerns about Chinese technology very seriously.”

In France, government departments are rethinking the nation’s relationship with Huawei, people familiar with the matter said.

Earlier this year, French Secretary of State for Digital Affairs Mounir Mahjoubi said that telecoms should work with European equipment makers.

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