Doors are slamming shut for Huawei around the world

Huawei is coming under pressure in two more key European markets — the latest in a series of problems the ...

Posted: Dec. 15, 2018 2:42 PM
Updated: Dec. 15, 2018 2:42 PM

Huawei is coming under pressure in two more key European markets — the latest in a series of problems the Chinese company faces around the world.

Telecommunications firm Orange has ruled out using Huawei products in its core 5G network in France, and Germany's Deutsche Telekom says it's reviewing purchases of Huawei equipment.

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The Chinese company, which sells smartphones and telecommunications gear, faces increased scrutiny in the United States and other countries, where officials have warned of potential national security risks from using Huawei products.

The recent arrest of its chief financial officer, Meng Wanzhou, has raised additional questions about Huawei. Meng has been released on bail in Canada, but she now faces a lengthy legal battle over whether she should be extradited to the United States, where prosecutors accuse her of helping Huawei get around sanctions on Iran.

Orange (ORAN), the largest telecoms operator in France, on Friday ruled out using Huawei equipment in its core 5G network in the country.

"We don't foresee calling on Huawei for 5G," Orange CEO Stephane Richard said Friday. "We are working with our traditional partners — they are Ericsson and Nokia."

Meanwhile, Deutsche Telekom (DTEGY) said it was taking the discussion about the security of network elements from Chinese manufacturers "very seriously."

"We are pursuing a multi-vendor strategy for the network elements used (manufacturers primarily Ericsson, Nokia, Cisco, Huawei)," it said in a statement. "Nevertheless we currently reevaluate our procurement strategy."

Huawei did not immediately respond to a request for comment sent outside business hours in China.

The announcement from Deutsche Telekom — coupled with news from SoftBank this week that it might also drop Huawei equipment — could also factor into the pending merger between T-Mobile (TMUS) and Sprint (S). Deutsche Telekom is majority owner of T-Mobile while Softbank owns Sprint.

Reuters reported Friday that the deal between the two US phone companies could now get approval from federal regulators who vet deals for national security risks. According to Reuters, the use of Huawei equipment has been part of the review.

Huawei is largely shut out of the US market, where it has repeatedly come under fire from lawmakers and government officials who accuse it of working under the influence of the Chinese government.

It has repeatedly denied the allegations, saying it's a private company owned by its employees. Huawei told CNN Business last month that its equipment is trusted by 46 of the world's 50 largest telecommunications companies.

But security agencies are particularly worried about Huawei's involvement in future 5G networks, because of the rise of connected devices, smart homes and the internet of things.

New Zealand and Australia have prevented telecoms companies from using Huawei equipment for their 5G mobile networks.

Issues for Huawei have cropped up in the UK, too. British telecoms group BT (BT) said last week that it would not buy Huawei equipment for the core of its 5G wireless network.

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