Nearly six years ago, the European Commission put forward its "5G cybersecurity toolbox", a set of recommendations for member states and telecom operators to manage security risks in new 5G tech. The recommendations included major concerns about certain vendors, focusing on the potential for espionage and over-reliance.
The toolbox defined these "high-risk vendors" as suppliers that may face pressure from a non-EU country, particularly one without legislative or democratic checks and balances. The Commission has since specifically named Huawei and ZTE as posing security risks.
Now, Commission Vice President Henna Virkkunen wants to make these recommendations a lot more forceful. Insiders claim the goal is to, in Bloomberg's words, "phase out" the Chinese tech giants from EU networks completely, and is considering turning the 2020 advice into a legal requirement.
Virkkunen is reportedly looking at more than just mobile networks and is examining ways to limit Chinese suppliers in fixed-line networks, especially as countries race to roll out new fibre cables. The commission is also thinking about how to discourage non-EU countries from using Chinese vendors. One reported plan involves withholding Global Gateway funding from nations that use the grants for projects involving Huawei equipment.
Countries that have banned the Chinese vendors outright include Sweden, which banned the use of Huawei and ZTE in its 5G networks back in 2020 and ordered their removal by January 1, 2025. The United Kingdom, though no longer in the EU, has also barred Huawei. More recently, Germany mandated that operators must remove all critical components from Huawei and ZTE from their 5G core networks by 2026.
Some countries, like Italy, do not have clear bans and instead review deals with Chinese manufacturers on a case-by-case basis. Then we have places like Slovenia, where opposition parties straight up rejected a bill that would have allowed for the exclusion of high-risk manufacturers from their networks.
Western alternatives to Huawei and ZTE, like Finland's Nokia and Sweden's Ericsson, do exist, but they have struggled to compete on price for years. Chinese state-owned banks have a history of offering extremely favorable, long-term financing to countries and telecom operators who chose Huawei or ZTE, creating a massive cost advantage that Western companies, without similar state backing, found difficult to overcome.
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