Telecom Italia Stands by Huawei as Peers Waver

Iain Morris
12/19/2018
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Telecom Italia has become the only one of Europe's "big five" telecom incumbents to make a firm commitment to Huawei amid concern about the security implications of using the Chinese vendor's network gear.

The Italian operator, which is understood to have carried out 5G trials of Huawei Technologies Co. Ltd. equipment, said it had not been warned off using Chinese suppliers by local authorities and would continue to work with Huawei in the absence of government restrictions.

"To this day, Telecom Italia has not received any indication from the government on how to manage the relation with its providers; if and when we receive indications on the matter we will act accordingly," a spokesperson told Light Reading in an emailed response to questions about its relationship with Huawei.

"Our strategy provides for diversifying the providers we work with in order that our networks do not depend on a single one, and Huawei is a business partner for Telecom Italia; we will continue this relationship unless different indications come from the government," said Telecom Italia's spokesperson.

Telecom Italia (TIM) is understood to have made its position clear during a recent meeting with government authorities.

Huawei has overtaken Sweden's Ericsson AB (Nasdaq: ERIC) in the last few years to become the world's biggest supplier of telecom network equipment and services, but it is currently facing a security backlash in Western markets. (See Huawei: New King of the CSP Market and Where Huawei Fears to Tread.)

Opponents fret that China's government could install "backdoors" in Huawei's equipment and use this to spy on citizens and organizations in other countries. Government authorities in Australia, Japan, New Zealand and Taiwan have imposed restrictions on Huawei. (See How the West Can Hurt Huawei.)

While European authorities have not moved to ban Huawei, both the UK's BT Group plc (NYSE: BT; London: BTA) and France's Orange (NYSE: FTE) have said they will not use 5G equipment from the Chinese vendor in their national markets. BT is also stripping Huawei gear out of its mobile core and optical networks and says it will not buy mobile edge computing products from Huawei. (See Orange Rules Out Huawei for 5G in France and Huawei Cut Out of BT's Mobile Core, Optical & Edge Plans.)

Table 1: Countries Where Huawei Faces Restrictions

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, but Sprint acquired Huawei gear with its Clearwire takeover and still had this in its network in 2016, 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
Source: Operators, government authorities, news reports.

Germany's Deutsche Telekom AG (NYSE: DT), which has built a 4G network with Huawei and is now testing its 5G kit, said last week it was "reassessing" its procurement strategy. "Deutsche Telekom takes the global discussion about the security of network equipment from Chinese vendors very seriously," the operator is reported to have said in a statement sent to various news outlets. (See DT, Orange Prove Europe Remains Hostage to US, Chinese Tech and Eurobites: Deutsche Telekom Joins Caravan of Concern Over Huawei.)

Shortly after that statement was issued, the German incumbent was reported to have secured regulatory approval to merge its T-Mobile US business with Sprint, whose Japanese owner SoftBank Corp. is also said to be replacing Huawei as a 4G supplier.

Those moves have prompted speculation that Deutsche Telekom and SoftBank came under pressure from US authorities to exclude Huawei. The US has been lobbying against Huawei in European markets, a Huawei spokesperson previously told Light Reading. (See Anti-Huawei Forces Focus on Sprint/T-Mobile Deal and Sprint/T-Mobile Merger Passes Major US Security Reviews.)


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Spain's Telefónica did not answer a question about government pressure to exclude Huawei.

"Telefónica takes the security and protection of its hardware and software network elements very seriously and has strong measures in place to ensure all of our vendors meet the highest safety standards," said a spokesperson in emailed comments, when asked if Telefónica was taking any steps to remove Huawei from its networks. "We continuously monitor all our systems to ensure they are working safely, and equip them with the latest security measures."

Like Deutsche Telekom, Telefónica appears to have used Huawei equipment to build a 4G network in its home market. It has also previously indicated it is relying on Huawei's virtualized core network technology across several markets in Europe and Latin America.

The details of Telecom Italia's existing relationship with Huawei are unclear, although it last month flagged a tie-up in Italy to provide SD-WAN services to business customers.

Earlier this week, Telecom Italia said it had completed its 5G rollout in the republic of San Marino, where it has used 5G equipment provided by Finland's Nokia Corp. (NYSE: NOK).

— Iain Morris, International Editor, Light Reading

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