Deutsche Telekom describes potential Huawei ban as 'Armageddon' scenario

Jill PetzingerJill Petzinger, Germany Correspondent, Yahoo Finance UK
Yahoo Finance UK

 

The German government has been divided on whether to include Huawei in its 5G network expansion. (Horst Galuschka/picture alliance via Getty Images)
The German government has been divided on whether to include Huawei in its 5G network expansion. (Horst Galuschka/picture alliance via Getty Images)

A ban on using network equipment from Chinese telecoms giant Huawei would be a catastrophe for Germany’s Deutsche Telekom, and would cost the company billions of euros, according to a report.

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A preparatory document for a meeting between Deutsche Telecom (DTE.DE) and Huawei managers, seen by business daily Handelsblatt, outlines a scenario where Germany, bowing to pressure from the US, bans Telekom from using the Chinese supplier in its 5G network buildout.

The company reportedly described such a scenario as “Armageddon,” as Deutsche Telekom would be forced to replace all the Huawei equipment it has already installed. It said this would take up to five years and cost at least €3bn ($3.4bn, £2.7bn).

Huawei technology is already embedded in over half of Germany’s telecommunications network, but its inclusion in the build out of 5G networks has become a hotly debated topic not just in Germany, but across the EU and US.

President Donald Trump has repeatedly demanded that US allies exclude Huawei from their 5G networks. He has threatened to limit intelligence sharing with countries that allow Huawei gear, saying the company represents a security threat as it could pass on sensitive information to the government in Beijing.

READ MORE: UK plans cut in Huawei's 5G network involvement to zero by 2023

The German government has been divided on the issue. However the Federal Network agency said in its guidelines in October last year that it would not exclude Huawei from participating in the country’s 5G infrastructure plan — but included a rule that critical network components must be certified and network providers and suppliers must prove that they are trustworthy.

The Chinese ambassador to Germany Ken Wu said last December that there was no law in China that demands its companies hand over data they have collected in foreign countries to the Beijing government. He threatened “consequences” if Huawei were to be excluded from the German market, saying: “The Chinese government will not stand idly by.”

UK cyber-security chiefs announced a fresh review of the telecoms’ firm’s role in Britain’s 5G rollout last month.

However, the US on Monday confirmed a report by Reuters that it will amend its ban on US companies doing business with — and selling their tech products to — Huawei in order to let them set 5G network standards together.

READ MORE: Huawei launches open letter to UK amid new review into 5G role

Telekom and Huawei declined to comment on the document reported by Handelsblatt, but a Telekom spokesman told the paper that many components from Ericsson and Huawei are already installed in the existing network.

“Excluding Huawei from 5G would also mean dismantling it from 4G,” the spokesman said.“Germany would be set back massively in 5G expansion.”

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