BERLIN, Sept 30 (Reuters) - The German government has agreed
in principle to tougher oversight of telecoms network vendors
that, while stopping short of a ban on Huawei, will
make it harder for the Chinese company to keep a foothold in
Europe's largest market.
Coalition and government sources said on Wednesday that
scrutiny of a vendor's governance and technology would be
extended to the Radio Access Networks (RAN) powering
next-generation 5G services, in addition to the more sensitive
core.
The sources confirmed a report in the Handelsblatt daily
which said that, after two years of wrangling, Chancellor Angela
Merkel's coalition had agreed on a formula for how to handle
so-called high-risk vendors in a proposed IT security law.
The compromise still needs to be drafted into a legal text,
which Merkel's cabinet is now expected to review in November,
Handelsblatt reported, without naming its sources.
European governments have been shifting their position
following pressure from the United States, which says the global
telecoms network leader poses a security threat because, among
other concerns, Chinese companies and citizens must by law to
aid the state in intelligence gathering.
Huawei, based in Shenzhen, denies that it would allow its
equipment to be used for spying.
German officials say that, while Britain has formally banned
Huawei and France will informally exclude it, Germany will
effectively strangle it in red tape. "The final outcome is the
same," one senior security official has said.
Germany's three mobile network operators - Deutsche Telekom
, Vodafone and Telefonica Deutschland
- are all clients of Huawei and have argued that
ripping out and replacing its equipment would be costly.
Market leader Deutsche Telekom's 5G network in Germany,
built largely with Huawei equipment, already reaches 50% of the
population. By the time the IT Security law takes effect, it is
expected to largely be complete.
(Reporting by Andreas Rinke and Douglas Busvine; Editing by
Mark Potter)
Vodafone (VOD)