Germany to cut Huawei from networks 'irrespective of costs'

Germany is determined to remove any systems from its telecoms networks that might pose a security threat, regardless of cost, in a remarkable reversal of the country's stance from just a few years ago.

In an interview with newspaper Handelsblatt, Germany's Federal Minister of the Interior Nancy Faeser chided the country's network operators for not moving faster to expunge kit from companies seen as potential security threats, including Huawei and ZTE.

"The risks have been known for a long time," she said. "I do think that the providers had enough time to adapt to this."

Irrespective of the costs to operators such as Deutsche Telekom, any components that were found to exhibit security issues would need to be disconnected, she said. "The network operators will have to act and dismantle the components."

This shows a dramatic change in the German government's attitude to the perceived threat represented by China-based tech firms. Just four years ago, Germany rejected pressure from the US to cut Huawei out of its telecoms networks, saying there was no evidence the company posed any security problems.

It's no coincidence that a new federal government, a coalition of the center-left Social Democrats, the neoliberal Free Democrats and the environmentalist Greens came into power in late 2021, replacing former chancellor Angela Merkel, who until then had headed up various coalition governments with a Wandel durch Handel ("change through trade") approach.

The cost of doing a rip and replace across the entire country is going to be significant. Huawei is said to account for roughly 60 percent of Germany's 5G network equipment. In the UK, which has much smaller volume of installed Huawei kit, the costs of removing and replacing it all have been estimated at about £4 billion ($5.1 billion).

Earlier this month, it was projected that a rip and replace policy would cost Germany's state-owned rail operator Deutsche Bahn alone upwards of €400 million ($434 million).

The European Commission, the executive body of the EU, is however pushing all member states to ban any telecoms gear made by Chinese companies from their networks.

In a speech delivered in June, European commissioner Thierry Breton said Europe cannot afford to maintain any critical dependencies that might become a weapon against the region.

He said the failure of EU countries to eliminate Chinese equipment from their 5G networks "poses a major security risk and exposes the Union's collective security since it creates a major dependency for the EU and serious vulnerabilities.

Huawei declined to comment on this latest development, but the company has always strongly denied that it or its products pose a security threat, and it issued the following statement in June when an EU-wide ban on its products was being mooted:

"Huawei equipment is routinely and closely scrutinized by governments and relevant security agencies according to stringent cybersecurity standards. No evidence has ever been provided to show Huawei's equipment has backdoors."

Yet, as we've mentioned before, under Chinese law - Article 7 of the National Intelligence Law - citizens and organizations must operate as covert tentacles of the state on demand, even if abroad.

Not everyone is going along with the EU and US on barring Chinese vendors from their infrastructure, however. Malaysia announced earlier this year that it will not interfere with commercial decisions made by telecoms operators in the country over who supplies the network kit for its planned second 5G network.

Huawei itself reported that its revenue for the first half of this year rose to ¥310.9 billion ($43 billion), up 3.1 percent on the same period a year earlier