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Huawei Wins Telefonica Deal to Help Build German 5G Network

By Bloomberg / Dec 12, 2019 05:50 AM / Business & Tech

Photo: Bloomberg

Photo: Bloomberg

China’s Huawei Technologies Co. just got a seal of approval from one of Germany’s biggest telecom companies.

Telefonica SA’s German unit, which operates the country’s second-largest wireless network, picked Huawei and Finland’s Nokia Oyj to take equal roles in supplying its fifth-generation mobile phone network upgrade, the company said Wednesday in a statement. The deal is subject to certification by German authorities, it said.

The announcement is a boon to Huawei after Deutsche Telekom AG said last week it stopped ordering new 5G equipment because of political uncertainty over Chinese suppliers. Huawei has repeatedly denied allegations its equipment could be used for espionage.

There’s one caveat, though. The German government is drawing up security guidelines for the country’s 5G network expansion in a move that’s expected to require certification of equipment, including antennas.

Hawks in the intelligence community would like to tighten the rules in a way that would block Huawei. Chancellor Angela Merkel said in the past she didn’t want to bar the Chinese company as long as it abides by certain security standards. It isn’t yet clear what requirements will ultimately be put in place, so it may be too early for Huawei to declare victory in Germany.

The deal with both companies to supply the less-sensitive radio access network “will be subject to the successful safety certification of the technology and the companies,” Telefonica Deutschland Holding AG said in the statement. The company “is taking into account the ongoing political process of establishing these security guidelines without delaying the start of the 5G expansion.”

Telefonica Deutschland hasn’t yet selected a supplier to upgrade the more-sensitive core network — the “brain” that houses control functions — and won’t do so until next year, Chief Executive Officer Markus Haas said on a call with reporters.

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