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SUSTAINABLE BUSINESSJANUARY 14, 2019 / 11:01 AM / |
Factbox: Huawei's challenges in Europe mount after Polish arrests.
(Reuters) - China’s Huawei Technologies [HWT.UL], the leading global supplier of telecoms network equipment, faces questions over its access to European markets after the arrest of a sales executive in Poland on suspicion of spying.
The detention of Wang Weijing, along with that of a Polish former security official, could lead Warsaw to ban the use of Huawei products by public bodies on national security grounds, a senior official said on Sunday.
Huawei is already barred from bidding for government contracts in the United States, while Australia and New Zealand have taken steps to ring-fence planned fifth-generation networks from Chinese vendors.
In Europe, debate rages over whether to join the United States and those allies in excluding Huawei. Concerns center on China’s National Intelligence Law which requires Chinese “organizations and citizens shall, in accordance with the law, support, cooperate with, and collaborate in national intelligence work.”
Huawei argues, for its part, that its networks are secure. On Saturday, it fired Weng, saying his “alleged actions had no relation to the company”.
The European Union should be worried about Huawei and other Chinese technology companies because of the risk they pose to the bloc’s industry and security, the bloc’s technology chief Andrus Ansip said in December.
Ansip was speaking after the arrest in Canada of Huawei chief financial officer Meng Wanzhou in relation to a U.S. investigation into an alleged scheme to use the global banking system to evade U.S. sanctions against Iran.
Germany has debated whether to bar Chinese network vendors on national security grounds, yet the government has stated it has no legal grounds to do so. Its cyber-security watchdog has welcomed the establishment by Huawei of a new information security lab that would allow regulators to scrutinize its gear through source-code reviews.
Deutsche Telekom (DTEGn.DE), Europe’s largest mobile operator, said in December it was conducting a group-wide review of its four main network vendors - one of which is Huawei. Analysts say this was vital to win U.S. security approval for a $26 billion deal for its T-Mobile US (TMUS.O) unit to buy Sprint Corp (S.N).
Other German operators are, for now, maintaining their ties with Chinese vendors.
Huawei has pledged to spend $2 billion as part of efforts to address security concerns in a British government report earlier this year which found that technical and supply-chain issues had exposed telecoms networks to new security risks.
The pledge came after a top UK official walked out of a meeting with the Chinese company over its perceived failure to fix security holes in its products, sources familiar with the talks told Reuters in December.
In France, market leader Orange (ORAN.PA) has said it will not turn to Huawei to help build its 5G network, citing the security concerns of the French authorities.
Orange is not a customer of Huawei in its home market, but the Chinese company does supply its overseas networks and says it expects to be involved in rolling out their 5G networks.
Norway is considering whether to exclude Huawei from building part of its 5G infrastructure, its justice minister said on Jan. 9.
State-controlled operator Telenor (TEL.OL), which has 173 million subscribers across eight countries in Europe and Asia, signed its first major contract with Huawei in 2009, a deal that helped pave way for the Chinese firm’s global expansion.
Telenor and competitor Telia (TELIA.ST) currently use 4G Huawei equipment in Norway and are testing equipment from the Chinese company in their experimental 5G networks.
The Czech cyber watchdog warned network operators in December against using software or hardware made by Chinese telecom equipment suppliers Huawei and ZTE (000063.SZ), saying they posed a security threat.
Some operators have tested 5G in the Czech Republic, while the investment group PPF, which owns the leading infrastructure provider, CETIN, has signed a memorandum of understanding with Huawei to cooperate on 5G. An auction of frequencies for the 5G transmission is planned for 2019.
Compiled by Douglas Busvine; Editing by Mark Potter