Data from Strand Consult shows Huawei remains a vigorous force in most of Europe's big economies despite EU warnings.
The European Union's classification of Huawei and ZTE as "high-risk" vendors implies Europe is one of the most dangerous places on Earth. Chinese equipment became the default choice for many of the region's telcos when 4G was being deployed. By the end of 2019, mobile communications for about half the customers across 27 EU and another five non-EU countries were routed over networks built by Chinese vendors, mainly Huawei, turning Ericsson and Nokia into runners-up on home soil, according to data from Strand Consult. The Danish advisory firm's recently published 5G update will anger Huawei opponents who insist the risks are even greater with the latest mobile technology.
Shared exclusively with Light Reading, the Strand Consult data shows that nearly a third of all 5G sites across these 32 countries were provided by Chinese vendors in the final quarter of 2024. In the absence of data for site numbers, Light Reading imprecisely calculated a crude regional percentage by adding country percentages and dividing the total by the number of countries. The resulting figure of 32% had not dropped since the second quarter of 2022 when Strand Consult last crunched the 5G numbers.
That is despite the EU's warnings and the efforts of several governments to restrict Chinese vendors. What's more, Strand Consult predicts they will still have a meaningful share of 5G networks toward the end of the decade. The same calculation described in the previous paragraph produces a figure of about 29% for 2028. If the presence of Huawei in 5G is a risk, Europeans are to continue living with a daily threat.
The supposed risk is slightly diminished when the 5G country percentages are used to calculate the number of "unique mobile subscribers," total figures for which Strand Consult provided as of 2023, on Chinese equipment. Again, this is an imprecise calculation because it does not consider population densities in different parts of a country, but it produces a figure of about 36% in mid-2022, dropping to 32% at the end of this year.
Risk and reward
The reward for choosing Huawei was competitively priced goods that previously beat rival technologies from the Nordic vendors on various performance criteria, by their own admission. The risk, said critics, was that China's military could use software installed in those products to spy on Europe or even switch off critical infrastructure. Huawei has long denied it is any kind of Chinese government stooge, pointing out that no evidence of software "backdoors" has ever been revealed, even though its products have been subject to more rigorous inspection than anything has from a competitor.
The latest data seemingly proves that little has changed since early 2023, when Thierry Breton, a former EU commissioner, hectored countries about the 5G "toolbox," an EU document recommending Chinese vendors be evicted from 5G networks. "Let me mention here that although 23 member states took legislative action to implement the toolbox, only seven of them have actually imposed the necessary restrictions," he said during a speech in Helsinki. "This is not enough."
However, progress has clearly been made since the 4G era, when Chinese vendors accounted for close to half of the deployed systems. A closer examination of the Strand Consult data shows some big changes in several important markets during the last two and a half years. Operators in ten of the 32 countries have cut their reliance on Chinese 5G equipment since mid-2022, often in response to legislative moves.
In the UK, which has ordered its telcos to remove Chinese products from their 5G networks by the end of 2027, just a fifth of all 5G sites were Huawei-built at the end of this year, down from 41% in the second quarter of 2022. In France, Italy and Spain, the three most populous EU countries after Germany, the Chinese percentage of the 5G total has also dropped. Telcos there have either focused on 5G deployment in areas served by other vendors or ripped out and replaced Chinese products.
Yet none of these big EU countries is expected to have 5G networks that are entirely free of Chinese products by 2028. And several other European countries – including Greece, Hungary, Poland and Switzerland – have grown more dependent on Chinese 5G since mid-2022. Arguably the biggest concern, though, is Germany. In 2019, 57% of its 4G infrastructure was supplied by Huawei, according to Strand Consult's data. By the second quarter of 2022, the equivalent 5G figure was 59% and it has not changed since then, reckons the Danish company. Strand Consult's forecast is that Huawei will account for the same proportion of Germany's 5G networks in 2028.
German coziness
That Europe's biggest economy, home to 14% of unique mobile subscribers across the 32 countries in Strand Consult's study, has not taken firmer action to remove Huawei is significant. As an architect of the EU, it is seen as an example setter by smaller member states. If German politicians do not take the Huawei threat that seriously, junior members of the block may wonder why they should do otherwise.
Worried about upsetting China, its biggest trading partner, Germany this year devised rules allowing operators to retain Huawei's 5G equipment provided they replace part of its management system. This workaround, however, has come in for harsh criticism. Several technical experts who spoke with Light Reading on condition of anonymity say it does not address the security threat previously identified by EU authorities.
Significantly, Huawei is still allowed under new rules to contribute radio access network (RAN) software – code that could theoretically include those "backdoors" for Chinese sabotage. Pairing Huawei's proprietary RAN with a third party's management system would also be difficult unless Huawei agreed to open its interfaces, something it has shown reluctance to do. Nevertheless, Deutsche Telekom, Germany's biggest operator, claims to be developing its own management system for the purpose of controlling a multivendor RAN.
Curiously, Deutsche Telekom confirmed in late November that it would be replacing Huawei at 3,000 of its 5G sites with Nokia. According to site numbers Deutsche Telekom recently shared, and Strand Consult's latest data, the move would reduce Huawei's presence by roughly 17% and look unusual if it stopped there. Historically, Deutsche Telekom has been happy to rely on two big RAN vendors in Germany. Introducing a third but limiting it to about a tenth of the footprint would have no obvious benefits. It could even add cost and complexity without doing much to address the perceived Huawei risks.
Deutsche Telekom may, of course, be hedging its bets in the event of an EU clampdown and political change in Germany. If nothing else, Strand Consult's data suggests telcos are largely unwilling to go against Huawei unless governments order it. US sanctions denying Huawei access to American technologies have so far had no perceptible impact on the competitiveness of its network products, according to multiple sources within telcos.
That could change if smaller and even more advanced chips become essential ingredients of future 5G networks. Today, China is thought to lack the extreme ultraviolet lithography (EUV) machines needed for profitable manufacturing of those chips. ASML, a Dutch company, is the sole developer of EUV technology, and its government forbids sales to China. But sanctions have made China's government even more determined to be technologically self-reliant in the coming years. In the meantime, political pressure may be the best Huawei's opponents can expect.
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