Germany Plans to Ban Some Huawei Components From 5G Network

Agatha Cantrill and Arne Delfs
·3 min read

(Bloomberg) -- Germany will likely prohibit some components in the country’s fifth-generation wireless network manufactured by Huawei Technologies Co. once an assessment of potential security risks is completed, according to a person familiar with the plan.

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Network operators could be ordered to remove some of the Chinese company’s components that are already installed, said the person, who asked not to be identified discussing confidential information.

The government in Berlin is taking a harder line on critical network infrastructure that serves as the backbone of its latest generation mobile technology after admitting last month that it doesn’t know how prevalent Chinese equipment is in its systems.

The plan to ban certain Chinese components was reported earlier by Die Zeit newspaper, which said parts produced by ZTE Corp. would also be targeted. The move comes as the US administration increases pressure on Chinese tech companies amid worsening relations between the two biggest economies.

Asked about the Zeit report at Tuesday’s regular government news conference, Interior Ministry spokesman Maximilian Kall said Germany is looking at parts that are currently used in its networks and whether there’s an excessive reliance on certain providers.

“No components have yet been prohibited, which is due to the fact that the assessment is still being carried out,” Kall said, without specifying any companies under investigation.

The review is also examining whether laws regulating critical infrastructure need to be stricter, he said, adding that under the existing rules network operators would not be compensated if they had to remove components.

The US, UK and European Union have become increasingly focused on security risks posed by Chinese companies. The European Commission last month banned staff from using TikTok on official phones after the US Congress restricted the use of the app on federal devices last year.

The US is reviewing existing licenses for exporting items to Huawei due to national security concerns. Some officials in the Biden administration are advocating for banning all US sales to Huawei, Bloomberg News reported in January, citing unidentified people familiar with the matter.

“Restrictions of an always reliable manufacturer with a very good security record are certainly not part of making infrastructures more secure,” Patrick Berger, a Huawei spokesman in Germany, said by email. A spokesperson for ZTE said the company’s products are secure and comply with German standards.

Unlike many EU countries, Germany originally avoided an outright ban of Huawei 5G technology in the face of US pressure to cut out Chinese infrastructure providers. Instead, the government decided all components for the 5G network deemed “critical IT infrastructure” need to be certified by the authorities.

The decision to ban some components comes as pressure on Berlin to act has steadily increased. In November, the EU’s competition chief Margrethe Vestager said countries need to phase out the use of high-risk 5G suppliers “as a matter of urgency.”

The US has spearheaded efforts dating back to the Trump administration to limit Huawei’s reach based on security grounds. Huawei is already subject to US trade restrictions and a group of senators including Majority Leader Chuck Schumer have proposed legislation that could cut off its access to US financing.

Before the US slapped sanctions on Huawei, the Chinese giant’s equipment was regarded as among the industry’s more advanced yet also most economical. Many carriers initially resisted calls to switch out its equipment, worried about costs and the difficulties of servicing new components. But wireless operators have bitten the bullet, worried that persistent US restrictions on American technology will eventually degrade or even cut off their access to Huawei products.

EU countries including Sweden, Bulgaria and and Greece have limited Huawei’s role in their 5G infrastructure. But the bloc’s “toolbox” to enable countries to stop using risky vendors is non-binding and allows countries and businesses to set their own policy.

--With assistance from Jillian Deutsch and Steven Arons.

(Updates with person familiar starting in first paragraph)

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