EU's changing stance on Huawei could impact 5G networks already in place

A prospective ban on Huawei's products in Germany could herald a sea change in the EU’s relationship with China, and raise thorny issues about ripping out 5G gear already installed in networks.

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Ongoing US diplomatic efforts to keep Chinese-made equipment out of as many networks as possible appear to be bearing fruit, as Germany eyes a ban on Huawei and ZTE 5G equipment, which would follow in the footsteps of several other European nations.

Sweden, Norway, and the UK have already implemented bans on Chinese-made equipment, following the US line that such hardware poses a national security threat thanks Huawei and ZTE’s close ties to the government in Beijing.

News of a prospective German ban was originally broken in March by German newspaper Die Zeit, citing government sources.

Yet Huawei, in particular, still has a substantial footprint in Europe. According to an analysis by John Strand, published in the Center for European Policy Analysis’ online journal Bandwidth, many countries still have Huawei equipment operating in their 5G networks. The percentage ranges from 100% (Cyprus) down to 17% in France, where authorities have imposed restrictions on where such equipment can be used. Germany, Italy, Ireland, Poland, Spain, Portugal, Holland, Austria, Switzerland and Finland, among others, also have substantial portions of their 5G networks operating on Huawei gear, according to Strand’s analysis.

EU changing stance on Huawei ban

The news that Germany could be the next to implement a ban represents something of a tipping point for Huawei’s status in Europe. While some parts of Europe have been resistant to US pressure on the issue, the EU itself, along with prominent member nations like Germany, seem to be changing course. As early as 2019, the European Commission issued a report detailing the dangers of interference by state actors in 5G networks, which was widely interpreted as a warning about suppliers backed by the Chinese government.

Some of that may have to do with a change in US leadership, as countries reluctant to take direction from the administration of US President Donald Trump — who disparaged NATO and oversaw a cooling of relations between the US and EU — find somewhat more credibility from President Biden’s government. According to IDC senior research director Len Padilla, it’s not something that would change policies directly, but it may still have an effect.

“Most EU governments are readier to take the Biden administration more seriously than the Trump administration,” he said. “If they think there’s a direction the Biden administration takes, they think there’s probably a reason for that.”

The potential for interference in the network is widely acknowledged, even by countries whose networks still use Huawei gear. But other issues make outright bans a thornier question. According to Bruce Schneier, a noted cybersecurity expert and faculty member at Harvard, net costs make it attractive for network operators to continue to use Huawei – and unattractive to replace.

“It’s all fun and games until the domestic part costs three times as much,” he said. “Security is not going to trump price, and it has to — if you want security, it costs and there’s no way around it.”

Geopolitics affects tech supply chain

The West seems to have arrived at that realization late, although measures like the CHIPS and Science Act in the US and similar laws going into effect in Europe indicate that the lesson has been learned. The idea behind those is to build up domestic chip manufacturing capability, in an effort to prevent supply chain-based issues — including those related to geopolitical issues such as the current US-China semiconductor trade war — from happening in the future. Nevertheless, according to Schneier, they’re unlikely to solve that problem quickly or on their own.

“As long as labor laws are what they are, domestic alternatives are going to cost more,” he said.

The issue isn’t so much the potential for the Chinese government to spy on national networks using Huawei gear, according to Schneier. That’s already commonplace, and Western governments do it as well, he said. The real concern is the use of compromised networking equipment to degrade western networks in the event of armed conflict.

“The worry is that they can shut everything down, so if China invades Taiwan, they can degrade those networks,” according to Schneier. “That’s the real risk, and you can do that undetectably.”

Rip-and-replace cost complicates potential Huawei ban

The issue of costs complicates the European calculus on potential Huawei bans both for new networks and for existing ones. Given the widespread presence of the company’s equipment in EU nations, the rip-and-replace costs associated with any ban “may make [governments] think twice,” according to Padilla.

“I don’t know how much funding there would be for rip-and-replace,” he said. “It depends on their economy — it would affect an operator in Spain more than in Germany, for example.”

Nevertheless, US-led pressure against Huawei appears to be bearing fruit. According to a report from Politico, the company has largely ceded the Five Eyes countries (US, UK, New Zealand, Canada, and Australia) as well as India, and has implemented cuts and consolidations across its marketing and lobbying efforts in Europe. Recently, reports emerged that the US and EU have jointly urged Malaysia to avoid using Huawei gear in an upcoming 5G network. And one source who did not want to speak on the record said that Huawei appears to be pivoting to the enterprise market, away from the more heavily regulated telecoms sector.

Although the security issues raised by both sides of this ongoing trade war are quite real — Schneier noted that China has banned Symantec, whose enteprise cloud offers data secuirty capabilities, for similar reasons — both he and Padilla agree that that geopolitics, rather than technology, are at its heart.

“My opinion is that the concerns are probably more political than technological,” said Padilla. “Certainly, it’s possible for any device vendor, be it Huawei or Cisco, to put things in the device that could potentially compromise some kind of security, but I’m not privy to any kind of information that shows that Huawei is doing that.”

“It’s all xenophobia,” said Schneier. “It’s the tip of a very complex iceberg.”


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