Germany prepping Chinese telco vendor ban - report

• German telcos have a lot of Chinese technology in their 4G and 5G networks
• So far the German authorities have shied away from any outright bans on the use of equipment from Huawei and ZTE
• But a report citing government sources suggests that is about to change
• Is this the beginning of the end for Huawei and ZTE in Germany?

Germany’s resistance to barring the use of Chinese technology in the country’s telecom network is about to crack, a move that would further hamper the status and business opportunities of Huawei and ZTE in Europe, according to a report in newspaper Zeit Online. 

Having so far declined to follow the lead of the so-called ‘Five Eyes’ intelligence-sharing countries of the US, the UK, Canada, Australia and New Zealand, and some other European Union member states, that have banned equipment from Huawei, ZTE and other Chinese companies from their critical comms infrastructure in general and 5G networks in particular on the grounds that they could be used for surveillance and spying, it seems the German government is about to change its policy and will now prohibit the deployment of some (or maybe all) Chinese technology in its critical strategic communications infrastructure, including 5G. In addition, it will instruct operators to replace certain Chinese technology that has already been deployed, according to the newspaper report, which cited government sources.

The report notes that German authorities have been examining the broader relationship between the European powerhouse and China and don’t like what they have seen. During the past 20 years and more, Germany has become increasingly involved with, and reliant on, Chinese technology, with major operators such as Deutsche Telekom and Vodafone Germany committed to Huawei for 5G radio access network equipment (RAN), even more so than for 4G network technology. 

However, most German telcos are believed to have avoided the use of Chinese manufactured comms technology in their core platforms, where subscriber information and security policies are managed – for example, Deutsche Telekom has migrated away from Huawei technology for its 5G core and is instead using products from Ericsson and Mavenir. The radio access network (RAN) is a different matter, though.

Two years ago, the German parliament passed new telecoms and IT security legislation that required telcos and service providers wanting to include Chinese equipment in their next-generation network to ensure that it should be rigorously tested and not be deployed where it could control strategically vital parts of the core network. However, the law stopped short of banning Chinese equipment, and now, according to Strand Consult, which tracks the deployment of Chinese technology in telecom networks very closely, Chinese (mainly Huawei) technology accounted for 59% of deployed 5G RAN gear installed in German mobile networks at the end of 2022. It’s notable, also, that the country’s 5G newcomer, 1&1, has made the point in investor notices that it has no Huawei technology in its network. 

But in recent months Germany’s Interior Ministry and the country’s cybersecurity agency, the Bundesamt für Sicherheit in der Informationstechnik (BSI – the Federal Office for Information Security), have been investigating the potential risks to national security that could result from the deployment of Huawei equipment in national 5G networks. And while the Zeit Online report notes that the authorities have not discovered any firm evidence of security breaches, the indication from the security authorities that Huawei and ZTE are closely linked to the Chinese government is, politically, enough to lead to some kind of ban on Huawei and ZTE. It has also been noted, though, that this might lead to greater dependencies on other RAN suppliers. 

In early response to the newspaper report, the Chinese government issued a statement claiming that the ban is the result of “protectionist desire to support non-Chinese rivals.” There'll be more protestations of innocence to come, but in due course the grounds for the bans will be revealed and the truth will out.

Other pressures have been weighing on the German government. In November last year, Margrethe Vestager, executive vice president of the European commissioners’ group “A Europe fit for the digital age”, noted during an update on cybersecurity developments that, "We are urging member states who have not yet imposed restrictions on high-risk suppliers to do that without delay, as a matter of urgency." At that time, Germany had done the least to conform to the European Commission’s 5G Toolbox recommendations, according to Vestager. 

Huawei has the most to lose from the developments in Germany, and if a blanket ban is imposed, it will only add to the ongoing retrenchment by the company in Europe, a scaling back that is also in evidence this week in the UK with news that the Chinese vendor might be pulling the plug on a £1bn R&D investment near Cambridge, according to a report in UK newspaper The Telegraph.