Home of Nokia Is Set to Pass 5G Security Law Locking Out Vendors

(Bloomberg) -- The home of 5G network-maker Nokia Oyj is set to introduce a telecommunications law which may be used to exclude China’s Huawei Technologies Co. and ZTE Corp. from its networks.

Finland’s parliament is expected to approve the bill designed to protect its networks against cyber threats and espionage in a session scheduled to start at 2 p.m. Monday in Helsinki. The proposed legislation names no specific companies or countries, but bans equipment “within the network’s key assets if there are strong grounds to suspect the use of such equipment would endanger national security or defense.”

“We aren’t pointing fingers at any one party,” Johannes Koskinen, a lawmaker from the ruling Social Democratic Party, said by phone when asked whether the law was directed specifically at Chinese companies. “We should ensure we don’t take action that closes doors for Nokia as a result of any backlash,” he said.

In neighboring Sweden, where Ericsson AB is based, a similar, more strongly-worded law has caused a spat with China.

Read more: China Warns Swedish Companies Could Suffer From Huawei Ban

For Nokia, it’s a mixed picture. On the one hand, there are profits to be made from networks where Chinese rivals are excluded. But the Finnish company also risks being shunned in China, a huge market for 5G gear.

Nokia calculates it has won about 43% of the value of deals created since several countries banned vendors from their networks, Chief Executive Officer Pekka Lundmark said in October. He also acknowledged the importance the Chinese market, and said the company is ready to relinquish some of its short-term profitability to gain market share in 5G -- something it resisted under its previous management.

A team of government officials and representatives from key telecommunications companies will be asked to assess how secure the networks are from a national security perspective. The responsibility for setting the technical specifications of what constitutes key assets in a network rests with the Finnish Transport and Communications Agency.

“The industry is developing fast and it may be that in a short time we see an Indian or Korean or Japanese or American company on the market, each with its own national interests. The situation isn’t stable,” said Koskinen, who has served as Justice Minister in three cabinets.

©2020 Bloomberg L.P.