Is Germany Weighing Its Options on Ways to Potentially Exclude Huawei from 5G Auction?

The German government is actively considering stricter security requirements and other ways to exclude China’s Huawei Technologies [HWT.UL] from a buildout of fifth-generation (5G) mobile networks, the Handelsblatt newspaper reported. Handelsblatt, citing government sources, said government officials were discussing setting security standards that Huawei could not achieve, effectively blocking its participation. Changes to the German telecommunications law were also under consideration as a last resort, the paper said.

The deliberations would mark a shift from the German government’s position in October, when it told lawmakers it saw no legal basis to exclude any vendors from an upcoming 5G auction following warnings from Washington. The government told lawmakers in a more recent response that the security of 5G networks was “extremely relevant”, and would guide its upcoming decisions, Handelsblatt reported.

U.S. officials have briefed allies that Huawei is ultimately at the beck and call of the Chinese state, while warning that its network equipment may contain “back doors” that could open them up to cyber espionage. Germany’s Deutsche Telekom announced in December that it would review its vendor strategy and France’s Orange said it would not hire the Chinese firm to build its next-generation network in France.

The shift by the national market leaders, both partly state owned, followed Huawei’s exclusion on national security grounds by some U.S. allies, led by Australia, from building their fifth-generation (5G) mobile networks.

Huawei says the security concerns are unfounded. Tensions have been heightened by the arrest of Huawei’s chief financial officer in Canada for possible extradition to the United States. Handelsblatt quoted Huawei founder Ren Zhengfei as saying his company had never received a request from a government to transmit information in violation of any regulations. “I love my country, I support the Communist Party, but I would never do anything that would harm another country in the world,” it quoted him as saying.