Germany stops short of Huawei ban, but raises bar to entry

It's been a long time coming, but Germany's coalition government appears to have finally reached agreement on how to handle "high-risk" vendors in a proposed IT security law after grappling with the issue for two years.

According to German broadsheet Handelsblatt, Germany has stopped short of issuing an outright ban on vendors such as Huawei Technologies, but has raised the bar for participation in 5G networks so high that the China-based vendor will be lucky to keep a foothold in the market.

Citing unidentified government sources, Reuters said scrutiny of a vendor's governance and technology would be extended to 5G radio access networks (RAN), in addition to the 5G core.

Reuters noted German officials say that while the UK has formally banned Huawei and France will informally exclude it, Germany will effectively strangle it in red tape.

"The final outcome is the same," one senior security official told the news agency.

The compromise is now expected to be drafted into a legal text, and reviewed by German Chancellor Angela Merkel's cabinet in November, according to Handelsblatt.

Swapping out

The move will come as a blow to German operators, which have deployed Huawei equipment in their existing networks and have argued that replacing it would be costly.

It's certainly no secret Deutsche Telekom has relied heavily on the Chinese company. The operator has signed contracts with Huawei and its other main supplier, Ericsson, to upgrade its radio access network from 4G to 5G, for example.

However, Deutsche Telekom also issued a statement insisting it is not as tied as it used to be. It probably hoped Ericsson's announcement of a stronger 5G partnership with its German client would back up that claim.

Strand Consult, an advisory group, estimates that Huawei accounts for about 65% of Deutsche Telekom's entire RAN, with Ericsson providing the remainder. Unless it wants to leave some 5G "not spots," Deutsche Telekom would have to replace all the Huawei gear.

In late 2019, Vodafone confirmed that Nokia is replacing Huawei in parts of Vodafone Germany's core network.

Meanwhile, Strand Consult estimated around 50% of Telefónica's RAN products in Germany are Huawei.

US authorities are now using the word "clean" to describe foreign networks that are free of Chinese influence.

José María Álvarez-Pallete López, Telefónica's CEO, has since confirmed that Telefónica Spain and O2 (UK) "are fully clean networks, and Telefónica Deutschland (Germany) and Vivo (Brazil) will be in the near future without equipment from any untrusted vendors."