Huawei loses allies in Europe on growing security worries
REPUTATIONAL DAMAGE FOR HUAWEI WILL BE SIGNIFICANT WHATEVER THE OUTCOME
The US has been pushing governments for months to block Huawei Technologies Co. from telecom networks. That strategy is now taking hold in Europe, where the Chinese technology giant is losing allies by the day.
European officials and companies, initially slow to act on the US warnings, last week increasingly distanced themselves publicly from the equipment supplier. The concern is that Beijing could use Huawei’s gear for spying — something the company has always denied. While there have been no outright bans, the outlook is dimming for Huawei in its biggest market outside China.
“Reputational damage for Huawei will be significant whatever the outcome,” said Neil Campling, telecom, media and technology analyst at Mirabaud Securities Ltd. “It seems likely that Huawei will lose significant share in the next three years.”
Continental concerns
In France, Orange SA said on Wednesday it won’t use Huawei gear to build fifth-generation wireless networks, after BT Group Plc in the UK pledged to rip out some of the company’s equipment. In Germany on Thursday, Deutsche Telekom AG raised the prospect of dropping Huawei. Then Friday, the Norwegian government said it’s ■ weighing concerns with using suppliers from countries with which there’s no security policy cooperation — an oblique reference to China.
“It’s been a week of negative announcements and indications from the biggest markets in Europe — the UK, Germany and France,” said Bengt Nordstrom, CEO of telecom consultant Northstream. Troubles in Europe for Huawei come on top of bans of its equipment in Japan, Australia, New Zealand and the US, and follow the arrest of its chief financial officer Meng Wanzhou, 46, daughter of the company’s founder.
Losing friends in Europe means Huawei risks missing out on orders for networks running into billions. Deutsche Telekom, one of its biggest European customers, alone plans to invest about €20 billion (Dh83 billion) in Germany in 5G and other high-speed internet connections through 2021.
The United Kingdom was the first major market in Europe to publicly raise doubts about Huawei equipment’s security in the run-up to 5G. The head of Britain’s spy agency MI6 said December 3 that the government needs to decide whether to allow Huawei as a 5G supplier.