Huawei nabs German 5G network contract, regulator approval pending

Chinese telecommunications equipment maker Huawei has won a bid from one of Germany’s biggest telecommunications companies to help build the country’s 5G network.

Why it matters: The deal with Telefónica Deutschland, the German branch of a Spanish telecommunications giant, is a sign that German wireless operators are willing to source 5G equipment from Huawei despite warnings from the US government and experts that the company’s products pose cybersecurity risks.

• However, a deal with a carrier doesn’t guarantee Huawei’s access to the German market. The country requires all suppliers to 5G network operators to submit a document self-declaring their trustworthiness and procure additional certification.
• The deal “will be subject to the successful safety certification of the technology and the companies according to the legal provisions in Germany,” (our translation) said Telefónica Deutschland in a statement (in German) on Wednesday.

Details: Telefónica Deutschland, operator of Germany’s second-largest wireless network, chose Huawei along with Finland’s Nokia as suppliers of its less-sensitive radio access network. The carrier said it would invest up to 18% of its revenue next year to accelerate the deployment of its 5G mobile infrastructure.

• Huawei and Nokia would be “equally responsible” for supplying gear for the project, according to the statement.
• The company hasn’t yet selected a supplier to upgrade the more sensitive core network which houses control functions and won’t do so until next year, according to Bloomberg, citing Telefónica Deutschland CEO Markus Haas.
• The company “is taking into account the ongoing political process of establishing these security guidelines without delaying the start of the 5G expansion,” said the statement.
• In addition to the self-declaration, 5G equipment vendors are also required to obtain a certification from the Federal Office for Information Security (BSI), Germany’s cybersecurity authority, to supply to carriers.

German foreign minister warns over Huawei’s state ties

Context: German Foreign Minister Heiko Maas questioned last month whether the country should allow Huawei access to its 5G network rollout, citing Huawei’s ties with the Chinese government.

• Top German government officials, including its defense minister and intelligence chief, have stated that Huawei cannot be trusted and that its equipment should be excluded from the country’s 5G network.
• A European Union report published in October warned that “hostile third countries” may force 5G suppliers to facilitate cyberattacks serving their own national interests.