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French telecom incumbent Orange has confirmed it will not be using Huawei as a 5G kit supplier in its domestic market but is not imposing a blanket ban on the Chinese vendor.
The update comes after Bloomberg yesterday reported that Orange (NYSE: FTE) would not work with Huawei Technologies Co. Ltd. on the rollout of 5G networks, citing comments that CEO Stephane Richard made during an interview with the newswire.
Clarifying those remarks, a spokesperson for Orange said they were made "in the context of France," holding out the possibility of deals in other markets and for other technologies.
Huawei is currently facing an international backlash amid concern that China's government could use "backdoors" in its equipment to spy on countries where it has a network presence. (See Where Huawei Fears to Tread.)
Meng Wanzhou, the company's chief financial officer, is also being held in Canada on charges of fraud. US authorities accuse Huawei of operating a subsidiary called Skycom that did business with Iran, in breach of US sanctions. Meng is charged with lying to US banks about the real identity of Skycom. (See Huawei CFO Posts Bail in Canada, Huawei CFO Committed Sanctions Fraud, US Alleges – Reports and China Slams Huawei CFO's Arrest, Huawei 'Not Aware of Any Wrongdoing'.)
Hardliners in the current US administration have pushed for a clampdown on Chinese equipment vendors this year. Huawei and smaller rival ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763), they say, have stolen US intellectual property, breached US sanctions and been a threat to national security in Western markets.
For market watchers, the clampdown reflects anxiety about China's growing technological power and is one front in the unfolding trade war between China and the US.
Including Orange in France, governments and operators in seven countries have now imposed some kind of restriction on Huawei and ZTE, typically citing national security interests. A spokesperson for Huawei says the US has been lobbying against the Chinese vendor in European markets.
Status | Country | Details | Known Huawei customers | Other major telcos affected by restrictions |
Govt restrictions | USA | US House of Representatives warned major service providers off using Chinese vendors in 2012, arguing "the risks associated with Huawei's and ZTE's provision of equipment to US critical infrastructure could undermine core US national-security interests." US temporarily banned component sales to ZTE earlier this year | None among Tier 1 telcos, although Sprint was formerly a customer and still had Huawei equipment in its network last year, as revealed by Light Reading | AT&T, T-Mobile US, Verizon |
Govt restrictions | Australia | Both Huawei and ZTE are barred from the 5G market and cannot sell products to NBN Co, Australia's national wholesale network | Vodafone Hutchison Australia | Telstra, Optus |
Govt restrictions | New Zealand | The government has warned Spark off using Huawei's 5G equipment and by implication would not tolerate 5G deals between Chinese equipment vendors and other telcos | Spark | Vodafone New Zealand, 2degrees |
Govt and operator restrictions | Japan | Starting in April 2019, Japan's government will ban its ministries and defense forces from buying and deploying IT and telecoms equipment from Chinese companies, citing cybersecurity concerns; SoftBank is reportedly replacing Huawei as a 4G supplier | SoftBank | NTT DoCoMo, KDDI, Rakuten |
Govt warning; operator restrictions | UK | Security watchdogs have this year flagged vulnerabilities in Huawei's equipment; telecom incumbent BT is stripping Huawei out of its mobile core and optical networks and says it will not buy any of Huawei's mobile edge computing products | BT, Three UK | O2, Vodafone UK |
Govt restrictions | Taiwan | Ban on equipment developed by either Huawei or ZTE has been in place for the last five years and was recently renewed, according to press reports | None | Chunghwa Telecom, Taiwan Mobile, Far EasTone and Taiwan Star |
Operator restrictions | France | Orange tells Bloomberg it will not use Huawei as a 5G kit supplier; Orange subsequently confirms to Light Reading that comments were made "in the context of France" | Altice, Bouygues Telecom | Orange, Iliad |
Orange's decision not to use Huawei as a 5G supplier in France will limit the Chinese vendor's role with a major European telco that is now preparing to launch 5G networks. During a press conference in Paris earlier this week, Richard said Orange would roll out 5G networks in 17 major European cities next year ahead of full-scale commercial launch in 2020. (See Eurobites: Orange Preps 5G Launch in 17 European Cities.)
The full extent of Huawei's current relationship with Orange is unclear, although the operator does not appear to have relied heavily on the Chinese vendor as a mobile network supplier in the French market.
Gabriel Brown, a principal analyst with Heavy Reading, says Finland's Nokia Corp. (NYSE: NOK) is known to be collaborating with Orange on 5G technology at a co-development center near Paris. Orange executives have also previously indicated that Sweden's Ericsson AB (Nasdaq: ERIC) is involved in its French 5G trials. (See Orange's 5G Plan: Definitely, Maybe.)
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Light Reading.
The French operator is understood to have developed a policy to avoid any reliance on "end-to-end" solutions from specific vendors. Accordingly, the 5G trials it is carrying out at Lille-Douai are focused largely on ensuring that products from different vendors are "interoperable," Light Reading has learned.
It remains unclear whether Orange has come under pressure from French authorities to prevent Huawei and ZTE from participating in 5G projects.
Governments in Australia, Japan, New Zealand, Taiwan and the US have either banned Chinese vendors or warned telcos not to use their equipment. (See Australia Excludes Huawei, ZTE From 5G Rollouts, Japan Next in Line to Block Huawei, ZTE and New Zealand blocks Huawei from 5G deal with Spark.)
In the UK, security watchdogs this year flagged vulnerabilities in Huawei's equipment, while telecom incumbent BT Group plc (NYSE: BT; London: BTA) has been stripping Huawei equipment out of its mobile core and optical networks. (See Huawei Cut Out of BT's Mobile Core, Optical & Edge Plans.)
— Iain Morris, International Editor, Light Reading
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