As France’s supreme court rejects the national operators’ challenge against the so-called ‘anti-Huawei law’, Germany’s apparent refusal to legislate a ban individual suppliers could yet mean hope for Huawei
Under mounting pressure from the US and concerns about national security, throughout 2020 Huawei’s prospects in Europe dwindled considerably. From blanket bans on the use of their equipment in upcoming 5G networks, to more subtle measures designed to wean operators from the Chinese equipment, the die has been cast for Huawei in many of its European markets.
But each European market is different and some are yet to close the door entirely.
In France, Huawei had been looking to improve their prospects when they last month announced plans to build a 5G equipment manufacturing plant in the Alsace region of France – its first outside of China. The French government was seemingly delighted, with a spokesperson from the economy ministry saying that the move “illustrates the attractiveness of France, at the heart of Europe.” For Huawei, the move came, at least in part, as a hope of demonstrating their commitment to the French market and to help allay national security fears around the use of their equipment.
Just days after this announcement, however, the government clarified that this move by Huawei would not affect their decision to phase out the use of Chinese equipment from its 5G networks.
"This investment decision is independent of the question of the deployment of 5G on French territory," said a spokesperson for France’s economy ministry, adding "we remain vigilant that investments in telecommunications infrastructure meet high national security criteria."
Further bad news struck Huawei’s French ambitions late last week, when the French supreme court rejected a legal case brought by the nation’s operators against the 2019 network security law, which has been described as the ‘anti-Huawei law’. The case was initially brought by Bouygues Telecom and SFR, both of whom use Huawei equipment for a significant portion of their LTE networks, with additional operator Free Mobile joining the cause at a later date.
Part of the legal challenge came as a result of the amount of Huawei equipment the ruling would case the operators to remove, with the operators seeking compensation from the government as a result.
The supreme court ruled that the legislation was consistent with the Constitution and rejected the legal case, denying any compensation. The decision to ensure the de facto removal of Huawei equipment from French networks by 2028 appears unshakeable.
Meanwhile in Germany, however, the situation remains much more ambiguous. The nation’s proposed new cyber security law, announced in late 2020, will not see the outright banning of any specific vendors, but will rather increase the scrutiny over equipment, both in the RAN and the core of the networks. At the time of its announcement, this was viewed by some as the same outcome as a complete ban on Huawei, by making the prospect of working with them very unappealing.
However, in reality the law appears to leave some scope for Huawei to remain in the market. Alongside a technical evaluation and a declaration that their equipment cannot be used for “sabotage or espionage”, under the new law any prospective vendor will enter a 30-day period during which relevant ministries will vote to decide whether to allow the company to participate in 5G networks. A vote to ban a company must be unanimous, with any disunity resulting in the company being allowed to participate in the rollout. Given that the Huawei–5G debate has been ongoing in Germany for two years now, reaching a unanimous decision to ban the company after just 30-days’ deliberation could prove a tall order, meaning there may yet be hope for Huawei.
The law itself is expected to pass parliament later this year, but further governmental scrutiny means that the vendors may not come under legal pressure until the autumn.
These long delays, meanwhile, may actually have served to push the operators towards Huawei. With 5G being rolled out rapidly around the world, the German operators cannot afford to wait for the government’s decision. Indeed, Deutsche Telekom has already begun incorporating Huawei equipment into its 5G network.
Naturally, this is a gamble – if a complete ban on Huawei tech does come to pass after all, the removal of this equipment will be expensive, with Telekom likening such a scenario to ‘Armageddon’ last year. However, it may be a risk worth taking, given their long-standing relationship with Huawei and the financial imperative of an immediate 5G rollout.
Over a year has passed since the US first laid sanctions against Huawei and began to pressure Europe to exclude them from their 5G networks, yet the Chinese vendor’s future in some of the largest markets in Europe remains as unclear as ever.