Germany battles over Huawei’s 5G role

Battle lines are being drawn in the Bundestag over Huawei’s role in Germany’s 5G broadband buildout, as Chancellor Angela Merkel’s government submits crucial draft IT security legislation later this month.

A coalition of conservative Christian Democratic party members who back US efforts to ban Huawei on spying grounds and left-wing Greens and Social Democrats incensed over China’s suppression of dissidents in Hong Kong and its Uighur minority oppose the Chinese tech giant’s participation in the nation’s 5G rollout.

German industrial companies, more dependent than ever on China’s growing economy and expanding domestic market, are lobbying for Huawei, partly because they fear Chinese retaliation against any German effort to exclude the world’s largest and most advanced producer of telecom equipment.

Germany’s new 5G network will be integrated with an existing 4G system. The costs of excluding Huawei from the rollout would hit the country’s mobile broadband providers on their bottom lines.

Deutsche Telekom, Germany’s largest telecom provider, reportedly calculated that replacing Huawei gear with other vendors’ gear would cost the company about US$3.5 billion, roughly the size of its annual profits. The company reportedly relies on Huawei for around two-thirds of its equipment.