US set to lose Huawei propaganda game in Europe – report

The US has been investing a lot of energy and time attempting to prove the value of banning Huawei, but it seems a failed quest as the European Commission readies itself to rule out a ban.

According to Reuters, Andrus Ansip, European Commissioner for Digital Single Market, will unveil new plans tomorrow (Tuesday 26). These plans will distance the Commission from the idea of an outright ban across the bloc but heighten security protocols and monitoring requirements for 5G. This is only a recommendation, but such is the political influence of the Commission, it would surprise few to see the proposals pass through to national legislation.

“It is a recommendation to enhance exchanges on the security assessment of digital critical infrastructure,” said one of the four anonymous sources.

The idea is a much more pragmatic and considered one. A ban on a single company, or companies from a single country, is far too narrow-focused and assumes threats can only emerge from that source. A broader approach to security, leaning on monitoring and heightened security requirements, allows the bloc to mitigate risk more effectively and take an impartial approach.

It is believed the Commission will suggest each country set-up mechanisms which can implement and monitor security requirements for equipment in 5G networks, while also creating accreditation processes. Products will seemingly have to be tested to mitigate as much risk as possible. These protocols and security credentials should be shared throughout the member states to create scale.

For the US, this is pretty much worse-case scenario. Its political influence and economic power has been undermined. By sending dozens of delegations across the continent in attempt to convince politicians a Huawei ban was the right way forward, it was clearly confident its lobbying credentials. Should Ansip proceed as anticipated here, the US’ belief in its own influence has clearly been over-estimated.

While the European Commission was reportedly considering a re-write of rules which would effectively ban Huawei and Chinese vendors from the 5G bonanza, this would have put the bureaucrats in conflict with the member states. The majority of European nations, and almost every European telco, has opposed the ban, citing heavy disruptions to 5G progress. Huawei is an important vendor in Europe and it seems Brussels has been listening.

The clues have been there over the last couple of months, but Europe is resisting the ambitions of the US and choosing its own path. The UK has long resisted any sniff of such a ban, while Secretary of State Mike Pompeo received a frosty welcome in Eastern Europe and Germany has most recently been pushing back. A smart bet would have been in favour of Huawei.

Although these are still rumours, we will wait for confirmation from the European Commission before getting too worked up, it seems a lack of evidence counted against the US lobby attempts. Suspicions over Chinese espionage will of course continue, but the importance of Huawei to European communications infrastructure cannot be undervalued. Without evidence, the US anti-China propaganda has fallen on deaf ears.

Security discussion needs to be bigger than Huawei – Vodafone UK CTO

Huawei is an obvious risk when you are assessing the vendor landscape, but to ensure supply chain resilience and integrity, focusing too narrowly on one company poses a bigger risk, according to Vodafone.

It might be easy to point the finger at China, but according to Vodafone UK CTO Scott Petty, this is a dangerous position to take. Despite a lack of evidence to suggest backdoors are being built into Huawei products, the world is determined to find one, but in reality, there isn’t a single company in the vendor ecosystem which can justifiably state they are 100% secure. This is the world we are living in; risk is everywhere.

“The discussion about Huawei is all managing the risk appropriately,” Petty said at a briefing in Central London.

Risk is a big topic at Vodafone UK right now, and this is clear when you look at how the vendor ecosystem is being managed.

On the radio side of the network, of the 18,000 base stations Vodafone has around the country, Huawei equipment accounts for 32% of them, Nokia 12% and Ericsson taking the remainder. Interestingly enough, Nokia equipment is being phased out in favour of Ericsson. For transmission, this is split between Juniper, Cisco and Ciena, while Cisco is responsible for the core. With this blend of vendors, and appropriate security gateways between each layer of the network, Petty feels Vodafone is managing the risk very appropriately.

And while some might suggest having this much exposure to Huawei might be a negative, Petty argues radio is such low risk it shouldn’t dictate play. You have to take into consideration the risk/benefit equation.

When assessing risk, Vodafone (working with the National Cyber Security Centre) considers two possible scenarios. Firstly, what is the risk of a nefarious actor leaching data from the network, and secondly, taking down the network. On the radio side of things, the exposure is very low.

Firstly, Vodafone has 18,000 base stations throughout the UK. Should one of these base stations be compromised, only the traffic going through that base station would be at risk. This will be a fraction of the total, devices will be handed off to other base stations as people move around, while the clear majority of internet traffic is encrypted nowadays. The likelihood of a nefarious actor trying to bleed valuable insight in this manner is low.

Secondly, even if one of these base stations is taken down by the external wrong-doer, this is only one of 18,000 base stations. To have a material impact on Vodafone’s network, hundreds or even thousands would have to be impacted simultaneously. This is not inconceivable, but highly unlikely. As Petty mentioned, its all about evaluating and minimizing risk.

This is where the discussion becomes incredibly complicated. Huawei is one of the leading names (if not the leader) in the radio segment, ignoring such a vendor is a difficult decision to make as a technologist; you always want to use best in class.

For transmission, another area Huawei would be considered a leading name, the risk has been identified as medium. You would still need a lot of compute power to crack the encryption software, but Vodafone have decided to steer clear of Chinese vendors here.

Finally, onto the core, the most important part of the network. Petty pointed to O2’s issues last year, where a suspect Ericsson node effectively killed the entire network for a day, to demonstrate the importance of this component. Cisco is the vendor here, but this leads us onto the dangers of a such a narrow focus on security.

When looking for signs of a telco vendor assisting a government for intelligence activities, there is arguably only one piece of concrete evidence to support such claims. Edward Snowden produced this evidence, proving Cisco was aiding the NSA for its own spying agenda. This is the reason we suspect the US is so convinced China is spying on the rest of the world; the US government is doing the same thing and therefore knows it is technologically possible.

We are of course not accusing Cisco of aiding the US government in this manner at this moment, but such is the sophistication and technological capabilities of those on the dark web, no company should consider themselves 100% secure. They have their own supply chains which could be vulnerable at some point. The complexities of this ecosystem mean nothing is 100% secure, therefore it comes down to risk assessment, and also the mitigation of risk through layers of security, gateways and encryption.

For Petty, the establishment of Huawei’s European cyber-security centre is a step in the right direction, though he would want the European Union to play an active role in its operations and for the net to be cast wider, considering all vendors. As mentioned before, too much of a narrow focus on one area heightens the risk in others.

However, the talk of a Huawei ban would be a disaster for everyone involved.

“We don’t think a complete Huawei ban would be a proportionate response,” said Helen Lamprell, Vodafone UK’s General Counsel & External Affairs Director.

If risk is appropriately managed and mitigated, business can continue as usual. Policy decision makers have to realise there is no such thing as 100% secure. A broad-sweeping ban on Huawei would be disastrous not only for Vodafone UK, but everyone in the connected economy.

Firstly, you have to think of the cost of removing all Huawei equipment. This would cost hundreds of millions and take a considerable amount of time. This would delay the introduction of 5G and fundamentally undermine the business case for ROI. It could set 5G back years in the UK, not only for Vodafone but the whole industry.

The supply chain review is currently working its way through the red maze of UK government, and while the certainty needs to arrive sooner rather than later, getting the review right is better than speed.

The message from Vodafone this morning was relatively clear and simple; the Huawei risk can be managed, but an outright ban would be disastrous.

Huawei asks people make their own decisions

In an open letter to US media outlets, Huawei has said it will open-up its doors for any journalist who decides they want to make up their own mind instead of listening to government propaganda.

Signed by Catherine Chen, Huawei’s board member who is responsible for public and government affairs, the letter invites the US press to visit the firm’s campus’ and speak with employees to get first-hand information. The inference here is relatively simple, you shouldn’t trust the White House, come and find out yourself.

“I hope that you can take what you see and hear back to your readers, viewers, and listeners, and share this message with them, to let them know that our doors are always open,” Chen stated in the letter. “We would like the US public to get to know us better, as we will you.”

And just to hammer home the statement, Huawei has also taken out a full-page advert in the Wall Street Journal this morning to publicise the letter:

With many US journalists seemingly operating on a different plane to US President Trump, it will be interesting to see how many take up Chen’s offer. Whether this has any direct impact on the anti-China rhetoric spreading across the US remains to be seen, as Trump certainly has been effective in spreading the ‘America First’ message.

However, there is also the risk of antagonising members of the press. Huawei is indirectly suggesting these individuals have not exercised their own ability of individual thought in recent months, instead simply relying on the stench which wafts out of the White House press room.

This letter is the latest attempt by Huawei to isolate the White House and its opinions on Chinese intelligence activities. The anti-Huawei rhetoric might not be catching on in Europe just yet, but another letter signed by 11 politicians reveals there might well be more aggressive strikes towards China across the US.

The letter, signed by the likes of Republican Senator of Florida Marco Rubio and Democrat Senator of Virginia Mark Warner, demands Huawei’s exclusion should be extended from the telecommunications segment and into any which manages critical infrastructure, such as electricity. The example which the Senators use is Solar Inverters, a component of electrical grids, for which Huawei is the worlds’ largest manufacturer of.

China has already been frozen out of the telecommunications world, but it seems the excitable politicians have smelt blood and are chasing down the wounded Huawei. The aggression towards the firm might start to get very wide-ranging.

Work with Huawei, or us, but not both – US Government

US Secretary of State Mike Pompeo has upped the ante with the anti-China rhetoric, declaring the US will not partner with countries who work with Huawei.

According to Fox Business, Pompeo has dropped the inference and made a statement which many countries will be cringing to hear. You no-longer have to read between the lines; it them or us Pompeo is declaring.

“If a country adopts this and puts it in some of their critical information systems, we won’t be able to share information with them,” said Pompeo. “In some cases, there’s risk – we won’t even be able to co-locate American resources, an American embassy and American military outpost.”

For countries like the UK and Germany, this is worst case scenario. These are countries which have vested interests from an economic perspective in both countries, and such is the state of affairs in the telco world, few can afford to strip Huawei out of the vendor mix. Pompeo is referring to administrative and military functions right now, but it would be fair to assume this could be extended to US commerce.

It’s a very tricky position to be in.

On one hand, there simply aren’t enough vendors in certain segments of the telco industry to generate suitable levels of competition to create the most viable economic position to fuel future infrastructure ambitions. Secondly, taking a vendor such as Huawei, arguably the leader in radio equipment, out of the mix would-be worst-case scenario for a technologist. Why would you want to ignore the best kit available?

However, on the other side of the coin, the security concerns are persistent, and do have some credibility. Evidence is circumstantial, some of the claims are hearsay, however you cannot ignore the risk. China does have a law which would force nationals to comply with its ambitions.

Should Pompeo’s statement evolve into more than chest-beating, numerous countries will find themselves in a painful tug-of-war. It does look like European nations are resisting the US’ Governments call to stonewall China, but this could come at a cost.

The US and China are two major trade partners of almost every economy in the world. To work with the US, you’ll have to ban Huawei, but if you ban Huawei you can almost guarantee there will be some form of reciprocal action from the Chinese Government.

The UK is an excellent example. Huawei has recently released a statement reiterating the investments the company has made in the UK, as well as the number of people who are employed as a direct and indirect result of its investments. Should the UK Government want to seize the post-Brexit trade carrot which has been dangled by the White House, some sort of action against China will be required. There is going to be a loss somewhere.

Poland is in a similar position. Pompeo is quoted as seeing “real progress” in the country after meeting Ministers in Warsaw, though if Poland was to ban Huawei it would certainly have an economic and societal impact; Huawei currently uses the country as its Eastern European HQ, employing roughly 900 people and investing substantial funds.

Over in Germany, China is a significant market for its automotive and heavy industrial exports, though if it was to submit to the US Government demands, you can guarantee there will be some sort of kickback.

All of these countries are now stuck between a rock and a hard place. Europe is proving to be a critical battleground in the US/Chinese war for technological supremacy, and while some narcissists might crave the attention, this is starting to turn into an impossible decision.

“No way US can crush us” – Huawei founder hits back

The usually publicity-shy Huawei founder Ren Zhengfei has hit back at what he perceives as a politically motivated attack, declaring if “the lights go out in the West, the East will shine”.

Although the US government has sustained the anti-China rhetoric over the last couple of months, with Huawei being the focal point of any aggression, the firm is holding strong. That is the message from Zhengfei, a usually media-adverse individual who is currently being carted around Europe in a show of strength against the White House. The aim for Huawei is to demonstrate transparency, and it does seem to be working in Europe.

“There’s no way the world can crush us,” said Zhengfei, in an interview with the BBC. “The world needs Huawei because we are more advanced. Even if they persuade more countries not to use us temporarily, we could just scale things down a bit. And because the US keeps targeting us and finding fault with us, it has forced us to improve our products and services.

“If the lights go out in the West, the East will shine. And if the North goes dark, there is still the South. America does not represent the world.”

While these comments are unusually aggressive for a man who does not like the limelight, they could prove as the perfect antagonistic weapon against President Trump. Zhengfei is sending a simple message across the Atlantic in this interview; the world is not siding with you in this quest.

Huawei has become a proxy in the overarching conflict between the US and China, though it is certainly faring better now than it did a couple of months back. During the initial exchanges, there was a considerable amount of collateral damage heading Huawei’s direction. Banned from providing equipment in Australia, New Zealand and Japan, plus other omissions in countries such as South Korea, it was an ominous sign. But Europe is seemingly not agreeing with Trump.

In the wider US/China dispute, Europe is a critical battle ground. As a bloc, the European Union is the second largest economy in the world. For both China and the US, winning favour would go a long-way to establishing political and economic dominance over the other. And Europe does not seem to share the same deep-rooted distaste for China as the US is currently harbouring.

Many European economies have established trade relationships with the Chinese, and while there are long-standing partnerships with the US also, none of these countries seem to want to readily shun the Chinese. This is the advantage which Huawei has in Europe, these are not nations which will so easily bow to the outside influence of the US.

In the UK, for instance, China is the 5th largest trade partner, as it is also in Germany. Its down in 7th for France, but still accounts for 4.3% of total trade, as it is in Italy for 3% of the total. For Belgium, China is the third largest partner outside of the European Union, while it is the second largest outside the bloc for the Netherlands. Trade with China is too important for the member states to consider siding with the US in the larger international conflict.

Of course, what you have to bear in mind is the over-arching European Commission supposedly considering ways to ban Chinese companies from contributing to critical infrastructure programmes. US Vice President Mike Pence has been touring Europe to talk up the importance of making a stance against China, and also dropping hints other European nations should ditch the Union, but success with the individual member states is looking far more limited.

With Germany and the UK seemingly favouring an approach which would heighten security protocols but still allow Huawei to operate, the Chinese firm is seemingly winning on the continent. With the US throwing political heavyweights at the nation states, Secretary of State Mike Pompeo was another to join the crusade of fear-mongering, the US might soon become quite agitated. Huawei’s resistance might infuriate the Oval Office, but the inability to bend Europe into its own image of perfection might will frustrate.

Europe was supposed to be a political boost for the US ambitions against China. This is of course the bloc which the US saved from the ravages of World War II and also a steadfast set of allies over the last few decades. Whatever the US has done, Europe has generally agreed to. But it seems the brash and aggressive style is not palatable to the conscientious and risk-adverse Europeans.

For Huawei, this is a massive battle. Europe as a whole is the largest market outside of China for Huawei, representing billions of dollars’ worth of business. However, its not just the network infrastructure ambitions at risk her, let’s not forget the consumer business has been making considerable progress across the bloc as well. The fact Huawei is wheeling Zhengfei around demonstrates how important this region is to the company.

President Trump sees himself as one of life’s winners. As the self-proclaimed ‘deal marker’, this is a man who is used to getting his way. With the power of the White House and US economy behind him, this is not an outcome he would have imagined. The stubbornness of the Europeans might force the White House into more drastic action before too long.

Trump’s Huawei executive order not much more than a power play

Rumours are swirling around Washington DC suggesting President Donald Trump is on the verge of signing another executive order, this one the final blow to Huawei’s US ambitions.

While the document itself will actually have very little impact on Huawei’s business, it is more of a symbolic blow to the kit vendor, as well as other Chinese businesses looking to exploit the riches of the Land of the Free. While the rumours were originally reported last week, by the time you get back to the office on Monday the order may well have been signed.

In a single signature, Huawei, a representation of China’s ambitions in the global technology and telecommunications industry, could be officially and explicitly shut out of the worlds’ largest economies.

Although details on the executive order are limited to rumour and hearsay for the moment, officials have stated this order will not impact electronics companies or products which incorporate Chinese components. This is a political move to demonstrate the power of the US. Trump is making a statement to China; look at what I can do to one of your flagbearers.

As it stands, Huawei’s involvement in US communications infrastructure is pretty minimal. T-Mobile US CEO John Legere has very publicly stated his business will very much avoid using Huawei equipment, while back in August Trump signed the Defense Authorization Act into law which effectively banned any meaningful work Huawei or ZTE could do in the US.

Huawei’s, and ZTE to a lesser extent, condemnation has become nothing more than a symbol of US dominance on the technology world. Trump is posturing, demonstrating what will happen to anyone who challenges the US leadership position. Over the last few months, US delegations have been visiting governments around the world to pitch the idea of a ban, admittedly with varied success, though there have been some willing to listen. Banning ZTE from using US components or IP brought the firm to the brink of extinction. The US forced Canada to arrest the Huawei CFO. A lot of this is a demonstration of power.

This is of course a complex and rich tapestry, and there are numerous intertwining and independent narratives going on. Some of it will be political, some economic, some espionage assumptions will be true and there will be validity to accusations of a government-influenced unfair playing field. This is an incredibly complex matter. But look at what the executive order actually is.

Huawei is already incredibly limited in the US, the damage to ambitions has already been dealt, this is chest beating from Trump.

China at the centre of US/Hungary passive aggressive spat

US Secretary of State Mike Pompeo has joined the European roadshow with the intention of lobbying other governments towards a China ban, but Hungary’s message is clear: mind your own business.

“We Hungarians, the Hungarian Government, has based our foreign policy on mutual respect, and we think that the world is not going to be a better place if some countries do spend their times by intervening in internal political affairs of other countries or lecturing other countries,” said Péter Szijjártó, the Hungarian Foreign Minister.

It’s a textbook example of political posturing and passive aggression. Szijjártó can’t get into an outright shouting match with Pompeo, but as so many politicians do Szijjártó is wearing a smile, talking calmly with very intellectual and soothing language. But don’t be fooled by the charm, Szijjártó is telling Pompeo to back off.

To understand why Szijjártó floating his passive aggressive skills, you must go back to Pompeo’s own comments.

“What’s imperative is that we share with them the things we know about the risks that Huawei’s presence in their networks presents: actual risks to their own people, to the loss of privacy protections for their own people, the risk that China will use this data in a way that is not the best interest of Hungary,” Pompeo stated.

“But second, we have seen this around the world, it also makes it more difficult for America to be present; that is, if that equipment is co-located in places where we have important American systems, it makes it more difficult for us to partner alongside them.”

In terms of getting their own way, US politicians are the experts at perfectly crafted passive aggressive rhetoric. Pompeo’s message is simple; you can of course make your own decision, but if you continue to do business with Huawei and China, you won’t find future success in the US. Pompeo is effectively using the economic attractiveness of the US as a partner as an indirect threat to bend Hungary to its will.

And China is once again at the centre of the spat.

To be fair, it should hardly come as a surprise the Hungarians are not particularly welcoming of the US politician. Yesterday, a US official described Eastern European governments as having a “higher propensity to corruption” than Western European counterparts. There are of course examples which prove this point but taking such a broad-brush approach to an incredibly diverse region of the world runs the risk of offending a few people. Hungary is clearly one of those nations which has taken exception to the remark.

The US has had some notable success in turning governments against Huawei specifically and China generally, Australia and Japan are two good examples, but in Europe there have been challenges. Various US delegations have been whispering in the ears of European politicians, warning of the dangers of doing business with Chinese companies, and while there might be some heightened security requirements, outright bans have been hard for the US to come by.

Hungary is now another which seems to be turning against the desires of the US.

“If you look at our cooperation with China, we represent 1.2” of the trade between the European Union and the People’s Republic of China,” said Szijjártó. “If you look at that Chinese company which is very often in the news nowadays regarding telecommunication, are they present in Hungary? Yes. Who are their major contractors? A German and a British company. So when it comes to China, I think hypocrisy should be left finally behind.

“We are usually accused, Central Europeans, that the so-called 16+1 format is so much breaking the European Union. Now out of the 16 countries involved in this cooperation, 11 are members of the European Union. Do you know how many percent of EU-China trade 11 of us represent? Less than 10 percent. So I think it’s not us that will be the game-changers in the relationship between, let’s say, the Western world and China.”

The US has certainly inflicted damage to Huawei as a business and China as a trading partner, but success in turning the European nations against the Asian superpower is looking limited right now. The US/China battle for international economic supremacy has certainly been an interesting one, though the current calming of tensions might just be rattling politicians into another outrightly aggressive move.

Europe sailing towards conflict over China 5G

Germany is drafting rules to allow Chinese companies to participate in the 5G bonanza, while the European Commission is thinking of banning them. Something’s got to give.

In terms of collective political influence and economic power, the European Union could consider itself more or less on par with the US and China. Considering the Union represents the societal, political and economic interests of 28 nations, more than 500 million people and roughly $23 trillion in GDP, it is certainly a powerful concept. But the China issue is just one example of how its neatly stitched patchwork could unravel very quickly.

China is a very tricky equation to balance right now. On side, you have an incredibly powerful economy, a massive and increasingly wealthy population and technological advancements which could benefit almost every society. However, to access these riches you have to deal with a government which ideologically conflicts with a lot of what Europe stands for.

But this is where a potentially significant conflict lies. The European Commission is reportedly looking at how it could create a de facto ban for Chinese technology and kit in communications infrastructure, conflicting with some of its member states positions. The Commission is supposed to represent the interests of all its member states, creating a common framework which sits above national policies, but if these policies are a contradiction of opinions of some member states the perfect storm could be brewing on the horizon.

Germany is not talking the anti-China rhetoric

The most recent reports echoing out of Berlin will not have the US government jumping for joy. Local newspaper Handelsblatt is suggesting the German government is doing everything it can to write security protections into new regulation, however, the rules will be written in a manner which will not exclude Chinese companies.

The reports have not been confirmed by any official government spokespeople as of yet, though this does follow on from the Federal Office for Information Security (BSI) made in December.

“For such serious decisions like a ban, you need proof,” said Arne Schoenbohm, President of BSI.

The US will not be happy about developments here, a delegation is currently undertaking a European lobby tour to turn officials against China, though neither will the European Commission. There are several instances which indicate the European Commission is taking a similar stance against China, suggesting a bloc-wide ban could be on the cards before too long.

Aside from recent reports the European Commission is rewriting cybersecurity rules to effectively ban Chinese companies from providing technology for communications infrastructure, one of its Commissioners has also fuelled the anti-China rhetoric.

“I think we have to be worried about these companies,” Commissioner for Digital Single Market Andrus Ansip told reporters in December. Ansip was referring to companies such as Huawei and ZTE, while this statement implies the Commission believes there are strong ties between multi-national corporations and the Chinese government.

The United States of Europe argument emerging again?

With Germany seemingly working to ensure collaboration with Chinese companies remains possible, the UK creating monitoring mechanisms to enable Huawei’s work and Italy denying reports it is considering its own ban, the European Commission appears to be working in direct contradiction to some of its largest member states.

To be fair, the role of the European Commission is to serve all the states not just the big ones, but the point of the bureaucracy is to create a common framework which all agree on, not rules which are forced onto member states. Cynics of the Commission and Union in general will suggest this is perhaps more evidence of Juncker and co. attempting to create a United States of Europe, where the desires of the member states are secondary to that of the ruling party.

Although many of these conspiracy theories are generally relegated to the comment boards of the Daily Mail, the Commission might well be heading towards a monumental conflict. Any rules which are written at European Commission level would potentially render national regulations redundant, a scenario those member states would not be happy with.

Considering the shoddy state of affairs Brexit has been creating, perhaps the European Commission should attempt to create an image of co-operation and collaboration. Antagonising leading member states is not a sensible idea, while a ‘state v. Europe’ conflict over security is not something which will reflect favourably on the agency.

Is politics anything more than arguing with shiny teeth?

Caught on the fringes of this conflict and the constant political seesawing are the telcos. Governments often tell the telco industry they are there to help and enable innovation, but it seems most of the time politicians are nothing but a hindrance attempting to score PR points by pandering to buzzwords and public opinion.

With governments aiming to ban Huawei and ZTE from connectivity plans, several telcos have stepped into the fray to give their own opinion. The message seems to be relatively consistent; heighten security requirements if you must but banning a vendor in an incredibly top-heavy market will not be a good idea.

“Clearly, if there were a complete ban at radio level, then it would be a huge issue for us, but it would be a huge issue for the whole European telco sector,” Vodafone CEO Nick Read said during the latest earnings call. “Huawei probably has 35% of the market share through the whole of Europe.”

Deutsche Telekom is another who foresees any Huawei ban being nothing but problematic. The German telco has previously stated a ban on Huawei would set its 5G ambitions back two years. Several telcos are considering scaling back work with Huawei, but this is perhaps directed more towards the uncertain political climate than any outright worry regarding the security credentials of Huawei equipment.

European telcos are not dependent on Huawei equipment to function effectively, but they are somewhat reliant on it. There aren’t enough suppliers, or good-enough suppliers, to strike Huawei out of the mix. US telcos are not having to deal with this headache as their operations adapted to a lack of Huawei and ZTE years ago, Europe is struggling with the political seesawing and story of uncertainty. Any business leader will tell you, a consolidated, cohesive and concrete regulatory landscape is critical for success.

Huawei stuck between a rock and a hard place

Huawei is a company which now has no control over its own fate.

With the US parading around political offices spreading its anti-China message without the burden of evidence, Huawei can’t do anything. Numerous governments are asking the vendor to prove its security credentials, but this will mean little is there is still suspicion. The case against Huawei is not based on evidence, but one which is based on a political and economic power struggle.

With a lack of evidence to substantiate any accusations against the firm, Huawei is being asked to do something which has been accepted as almost impossible; prove a negative. All of the questions and queries being directed at the firm have a single aim, to demonstrate there are no ties between the organization and the Chinese government, as well as its intelligence agencies.

It’s an almost impossible task, especially when you take into account the powerful influence of the US and the fact most of these decisions are being made on hearsay, circumstantial evidence and emotion. Whatever Huawei says, however much evidence is put on the table, we suspect opinions have already been made.

An issue of consistency and contradiction

In a single signature, the European Commission could throw the bloc into disarray. If the rumours evolve into reality, the European Commission could impose its own rules, contradicting the hopes and ambitions of some member states. Such a scenario would question how much control the member states have over their own society, undermining the concept of sovereignty.

Any fundamental changes would certainly have to be greenlit by all member states, but the European approach to China on the whole, and Huawei specifically, has not been entirely consistent. One question which might be worth considering is whether the European Commission is overstepping its remit.

We are almost certain Germany will not be happy being told to ban Huawei considering it seemingly wants to ensure Chinese participation in the upcoming 5G bonanza. Conflict is on the horizon, potentially pitting the European Commission against the biggest financial contributor to the bloc.

Signs not looking positive for Huawei and ZTE in Italy

Reports in local press suggest Italy could be the next country to bow to pressure from the US, banning Huawei and ZTE from contributing to communications infrastructure.

Although many telcos across the bloc have been taking precautionary measures against Huawei and ZTE, Telecom Italia (TIM) has previously stated it would continue to work with the vendors until the government told it otherwise. This is a market which looked relatively safe for the both parties, but things are starting to look quite wobbly.

This is a largely unconfirmed report however Italy’s La Stampa newspaper has claimed the Defense Ministry and Ministry of Foreign Affairs is ready to bring out the ‘Golder Powers’ to enforce the ban. The ‘Golden Powers’ effectively give the government the power to do whatever it wants, and in this case will be applied to contracts allowing the government and telcos to exit without financial penalties from the vendors.

Security concerns have of course been cited as the reasoning, with the paper suggesting strong pressure from the US government. Italy currently has several US military bases across the country.

The US government has been on somewhat of a European road-trip over the last month, with Foreign Office officials meeting with counterparts in European governments to pitch the case of paranoia. Although little concrete evidence has been presented to support the accusation companies like Huawei are supporting the Chinese government’s espionage campaigns, Europe does seem to be turning against the vendor.

Italy might be the next domino to fall, though it seems to be in a race with Poland. Following the arrest of a Huawei employee in recent weeks on the grounds of corporate espionage it does look like the vendor (or potentially Chinese companies on the whole) will be banned from the country. This would be a huge decision to make though as Poland acts as the HQ for Huawei’s Eastern European business, employing roughly 900 people.

While there are countries which are resisting the calls to ban Chinese involvement in 5G infrastructure, Germany is one drafting rules to heighten security requirements and Huawei has seemingly ticked all the boxes in the UK, the power of the US lobby is proving effective. Of course, these battles in the individual nations are only part of the problem, the US delegation has been whispering in the ear of the European Commission in recent weeks. We all know the Brussels brunch brigade love a free lunch…

GSMA set for crisis meeting at MWC over Huawei bans – report

GSMA Director General Mats Granryd has reportedly been writing to members to set up a meeting on the side-lines of Mobile World Congress to discuss what to do about further Huawei bans.

Huawei might be facing pressure from governments around the world, but if reports turn out to be true, diminished support from the operator industry’s own lobby group would be a significant dent in the confidence of the vendor. As Huawei is one of the firms which contribute financially to GSMA events with astronomically large stands and branding presence, it certainly would be a brave move from the association.

According to Reuters, Granryd has proposed the implications of further Huawei bans should be discussed as an item on the agenda at the next board meeting. The meeting will take place during Mobile World Congress in Barcelona at the end of the month.

The GSMA has been evasive in its response to the claims, confirming there will be a board meeting (there always is), though the agenda has not been set. The meeting will of course discuss all the most pressing points in the telco industry, of which the Huawei situation has to be one, but there is no confirmation of specifics.

That said, it would not be unusual for such a discussion to take place. The GSMA board is made up of representatives from 25 of the worlds largest operators, the majority of which must be twitchy about the relationship between Huawei and the Chinese government. The US, Japan and Australia have already banned Huawei from contributing to 5G infrastructure, while more are putting very stringent conditions around participation.

Germany is one which is considering upping the security requirements to protect itself, however, Chinese companies which meet the criteria would still be allowed to do business. However, these protections might well be superseded by broader sweeping rules from the European Commission banning any companies from ‘suspect’ countries from providing kit for critical infrastructure.

Another Reuters report quotes German leader Angela Merkel as calling for guarantees from Huawei that it won’t hand over data to the Chinese state. Everything about Huawei will make executives nervous at the moment. To make such vast investments the telcos need certainty and consistency with policies and regulations. Huawei is the polar opposite of these concepts.

The focal point of the anxiety is the National Intelligence Law, which kicked into effect during July 2017. The law gives Chinese intelligence agency an extraordinarily wide remit to monitor both domestic and international ‘threats’, as well as the power to coerce domestic Chinese companies to aide its ambitions.

Here are a couple of the relevant articles from the original text passed into law:

  • Article 12: National intelligence work institutions may, according to relevant state regulations, establish cooperative relationships with relevant individuals and organizations, and commission them to carry out related work.
  • Article 14: National intelligence work institutions, when carrying out intelligence work according to laws, may ask relevant institutions, organizations and citizens to provide necessary support, assistance and cooperation.

For such a complex and powerful document, the language and remit are worryingly broad and vague. The law itself only has 32 articles, compared to hundreds of articles and even more clauses of immensely precise text in other countries.

Considering the GSMA named Huawei as the winner of the associations ‘Outstanding Contribution to the Mobile Industry Award’ for 2018, everything that has taken place since the last event puts it in a difficult position. If the GSMA decides on a general policy of distancing its members from Huawei in anticipation of further bans, that would be a significant further blow to the Chinese vendor.