New challenges have cropped up for Chinese tech giant Huawei in Europe following an announcement by Germany’s Deutsche Telekom about its decision to review its vendor strategy. Additionally, Orange has also said that equipment from the Chinese company would not be used by it for its project of setting up the 5G network in France.
Both the companies mentioned above are leaders in their national markets and both have the national governments as shareholders. This new challenge for Huawei comes after a number of jolts in countries like the United States, Australia and New Zealand where it has been banned for bidding in supplying equipment for construction of 5G networks while in the US it has been banned altogether from participating in any government projects. Many governments in Western countries are weary about the interference of Chinese government and the possibility of use of Huawei’s equipment by Chinese governments to spy on foreign countries.
Last month, companies and government in ally countries were requested by U.S. officials to refrain from using Huawei equipment because the company owes strict allegiance to the Chinese government and therefore is heavily influenced by it. The US had also warned that there can be “back doors” in the equipment of Huawei which could be used by China for cyber espionage.
This decision of review by Deutsche Telekom was announced even as proposed $26 billion takeover by its T-Mobile US unit of Sprint Corp is being scrutinized by U.S Sprint Corp is controlled by Japan’s Softbank.
There have been reports emerging in Japan that SoftBank, h\whose IPO is set to be launched in December 19 and which has already shown great response from investors, is reconsidering replacing equipment supplied by its long time partner Huawei for its 4G network.
Huawei has repeatedly refuted the basis of the concerns of some governments. The recent arrest of CFO of Huawei in Canada at the behest of the US has caused tensions between the US and China.
“We don’t foresee calling on Huawei for 5G,” Orange CEO Stephane Richard told reporters in Paris. “We are working with our traditional partners – they are Ericsson and Nokia.”
The security concerns were legitimate, Richard said. “I absolutely understand that all of our countries, and the French authorities, are preoccupied. We are too.”
Orange’s existing 4G network in France did not have any equipment from it, Huawei said in response and added that it would not be a part of the 5G plans of the company for France. The company said it does supply Orange’s networks outside France and.
The recent concern expressed about the security of Chinese equipment is forcing Deutsche Telekom to review its vendor recruitment strategies and policies for Germany as well as in markets that it operates in. Deutsche Telekom is the largest telecommunications company in Europe.
“Deutsche Telekom takes the global discussion about the security of network equipment from Chinese vendors very seriously,” the company said in response to a media query.
(Adapted from Reuters.com)