After the difficulties with the US government, the Chinese company Huawei – which produces telecommunications devices and systems – risks losing important customers in Europe too, or at least seeing its activities largely downsized. Several government agencies and European companies have in fact begun to distance themselves from Huawei, following the suspicious approach adopted for months in the United States.
The suspicion is that the Chinese government may exploit the presence of Huawei's equipment in other countries, where they are used to operate telecommunications networks, in order to steal information and engage in espionage. So far, Huawei has not undergone a real ban in the West, but the growing skepticism about its reliability risks significantly diminishing the market opportunities for the company outside of China.
Orange SA, one of the largest telecom operators in France, announced last week that it will not use Huawei's systems to build its new 5G network, the technology that will replace current 4G for high-speed cellular internet. Building the repeaters and other 5G equipment is a huge opportunity for the companies that deal with it, so Huawei will lose commissions worth several hundred million euros.
According to sources close to French President Emmanuel Macron, consulted by Bloomberg, France intends to approve new rules on telecommunications equipment, with much more stringent constraints for producers. Huawei could be included in the list of companies to keep more under control, in the field of national security systems.
In the UK, the operator BT Group has instead vowed to remove some of Huawei's equipment hitherto used in its network. They will be replaced with competing products, probably from European companies deemed more reliable. In Germany, Deutsche Telekom has hinted that it has similar plans, with a program to reduce its dependence on Huawei's equipment. Finally, in Norway, the government has announced a comprehensive overhaul of its telecommunications systems, especially for those built in countries with which there is no direct collaboration on security issues. The reference, although indirect, was addressed to China and its industrial policies. Europe is joining several other countries around the world who have decided to cut back on their relationship with Huawei. These include Japan, New Zealand and Australia.
In Italy, meanwhile, Huawei is working on the first tests of 5G networks in Milan and between Bari and Matera. In Milan the activity is carried out in collaboration with Vodafone, while in Bari-Matera he works with Tim and Fastweb. For now, the Italian government and the operators have not expressed particular concerns about the use of Huawei instruments in our country.
Things got even more complicated for Huawei in the United States following an arrest request for Meng Wanzhou, Huawei's chief financial officer and daughter of the company's founder. Meng is accused of having participated in a plan to violate economic sanctions against Iran. Her extradition request was filed a few weeks ago in Canada, where Meng was arrested in early December. A court recently granted her bail, pending her eventual extradition.
It is not yet clear what the actual choices of individual operators and Chinese governments will be, and not all analysts agree on the feasibility of a real ban on Huawei. Its instruments are considered to be of quality and at competitive prices, difficult to replace in the short term and in a phase of great demand for the development of 5G networks. Operators could turn to other European producers, but they would not have the production capacity necessary to fully satisfy demand. Without Huawei, there could be a shortage of resources that would also cost dearly to those who have to build the new networks.
