Germany not to ban Huawei from its 5G networks

Jill Petzinger
Jill Petzinger, Germany Correspondent, Yahoo Finance UK
Huawei has the largest number of 5G patents in the world. Photo: Kacper Pempel/Reuters

Germany will not exclude Huawei from participating in the country’s 5G infrastructure plan.

The government’s security guidelines for building the country’s 5G networks released on Tuesday does not exclude the Chinese telecoms firm targeted by the US over spying accusations.

The debate about whether to allow Huawei to bid in 5G auctions has become increasingly heated over concerns that it may feed sensitive government security information or defence data back to Beijing.

Germany’s Federal Network Agency’s draft security guidelines make no mention of Huawei. The security guidelines, however, include a rule that critical components of the network will need to be certified and that network providers and suppliers must prove that they are trustworthy.

"It is important to protect information and communication systems against threats, Jochen Homann, president of the Federal Network Agency, said in a statement. “These updated security requirements for telecommunications networks and services make an important contribution towards that.”

Homann told the Financial Times earlier this year that that Huawei is a major patent holder and banning it from the German market “would delay the roll-out of the digital networks."

The US government has been leaning hard on Germany and other allies to ban the Shenzhen-based company from bidding in their national 5G auctions. US secretary of state Mike Pompeo went as far as to issue a veiled threat in Berlin in May that Washington may withhold national security data from countries whose networks contained Huawei gear.

The British government is still undecided on whether to exclude Huawei from its 5G network. Digital secretary Nicky Morgan told the BBC she hoped the government "could do something by the autumn."

A special European Commission report last week appeared to point the finger at China and Huawei, warning that “non-EU or state-backed actors” are the biggest security threat to 5G networks.

US President Donald Trump blacklisted Huawei in May, banning it from buying components, such as semiconductors and software, from US companies.

Paul Triolo, geo-technology practice head at Eurasia Group, told Yahoo Finance UK in July that the “cold war” for global tech supremacy between the US and China is bad news for everybody, as, for one, it may force companies to recreate and duplicate expensive 5G systems if they cannot buy from the Chinese leader in the field, and could delay 5G rollouts.

READ MORE: The 'tech cold war' between the US and China looks 'set to rage on'

Huawei, which holds the world’s largest number of 5G tech patents, has been on a PR offensive to prove its trustworthiness. Earlier this year the company released a study underlining its contribution to the German economy. The study, commissioned from the German Institute for Economic Research, said Huawei had invested over €450m (£391m) in research and development in Germany between 2013 and 2017, and in 2018 had a gross value-added-effect of €2.3bn on the economy.

READ MORE: Hounded by US, Huawei finds a more receptive market in Germany