Huawei and Co. - The complex renunciation of Chinese technology in 5G-network
The German federal government and mobile network operators have reached a consensus after a long dispute on a near-ban of Chinese 5G technology. To prevent damage claims, the compromise was reached in the form of a public-law contract, as Federal Interior Minister Nancy Faeser (SPD) announced in Berlin. The agreement provides the providers with more time for the transition and allows them to continue using simple elements from Huawei and ZTE. In return, the providers are obliged to carry out a comprehensive swap-out - and not just in the vicinity of federal ministries and sensitive institutions.
In the core network, critical components must not be used after the end of 2026, Faeser explained. This concerns the central 5G computing centers for data transfer. In a second step, it concerns access and transport networks, including radio masts. The financial conditions have been agreed upon in silence by all parties. Faeser refused to comment on possible compensation payments.
Urgent action required due to sabotage and espionage risks
The Federal Interior Minister saw an urgent need for action because she wanted to arm Germany against risks of sabotage and espionage during the expansion of the networks. But Economic Minister Robert Habeck and Foreign Minister Annalena Baerbock (both Greens) also pressed for swift action. They drew a parallel to Germany's previous dependence on cheap gas imports from Russia. The Federal Republic should not rely on key components for the fifth generation (5G) mobile network from China. Digital Minister Volker Wissing (FDP) expressed concerns about the potential worsening of mobile network coverage after a restructuring.
World market leader Huawei in focus
The concerns of politics mainly focus on the world market leader in the field of mobile infrastructure, Huawei. But political concerns also exist against the smaller Chinese competitor ZTE. Huawei is the leading Chinese technology company, which not only manufactures smartphones, tablets, and laptops but also supplies various infrastructure projects as a significant supplier. The company is not listed on the stock exchange but emphasizes that the company belongs to its employees through employee shares and is controlled by them. However, like other Chinese companies, Huawei is also influenced by the Communist Party and the state leadership. The company is legally obliged to cooperate with the Chinese government.
Accusations from the USA
Politicians and economists from the USA accuse Huawei of spying on its customers abroad on behalf of the Chinese government due to the authoritarian power structures in China. The corporate structure is also criticized as opaque. Formally, the employee shares did not belong to the employees themselves but to a trade union. And the union, like all unions in China, is controlled by the Party. A "smoking gun" has not been presented by Huawei critics: The company has never been publicly accused of spying or sabotage in concrete cases.
Alternatives from Scandinavia
Besides Huawei and ZTE from China, there are mainly Nokia from Finland and Ericsson from Sweden active on the market for Radio Access Networks (RAN). Technologically, they are in the same league, but the Chinese suppliers are often cheaper. An alternative concept is Open RAN, in which components from different manufacturers can be combined. Besides the classical RAN providers Huawei, ZTE, Nokia, and Ericsson, new players like Rakuten Symphony (Japan) or Juniper Networks (USA) are entering the market.
Huawei already excluded from the UK
Huawei has already been excluded from the UK.
The most comprehensive experiences come from Britain, where Huawei was excluded as a supplier in 2020. In February 2024, a 5G-benchmarking test by the Spanish company Medux showed that Britain only had a weak 5G network compared to internationally. In this comparison test, Berlin ranked first, followed by Barcelona and Paris. London was significantly behind on the last place of the metropolitan rankings. Digital Minister Wissing is confident, after the compromise, that this scenario will not repeat itself in Germany and the 5G rollout will not come to a standstill. With the agreed transition periods, network operators will be given the necessary time for a smooth transition.
- The consensus between the German federal government and mobile network operators involves a near-ban of Chinese 5G technology from companies like Huawei and ZTE.
- In Berlin, Federal Interior Minister Nancy Faeser announced that the agreement provides more time for transition and allows for the use of simple elements from Huawei and ZTE, but with a comprehensive swap-out requirement.
- The providers are not only required to replace critical components in the vicinity of federal ministries and sensitive institutions but also in the core network by the end of 2026.
- Robert Habeck and Annalena Baerbock, both from the Greens, pushed for swift action to avoid relying on key components for the 5G mobile network from China, citing potential risks of sabotage and espionage.
- The world market leader in mobile infrastructure, Huawei, is under scrutiny due to concerns about spying on customers abroad on behalf of the Chinese government.
- Politicians and economists from the United States of America accuse Huawei of being influenced by the Communist Party and the state leadership, and they criticize the company's opaque corporate structure.
- Alternative suppliers like Nokia from Finland and Ericsson from Sweden are popular options in the Radio Access Networks market, offering comparable technology at a lower cost.
- Huawei has already been excluded from the UK, resulting in a weak 5G network compared to internationally, as shown in a 2024 benchmarking test by Medux.
- Digital Minister Volker Wissing is confident that Germany's rollout of 5G will not come to a standstill after the compromise, ensuring a smooth transition for network operators with agreed transition periods.
