Mobile security

Huawei Clears Danish Security to Oust Ericsson

Huawei has displaced Ericsson as TDC's long-term mobile network technology and services partner following a security vetting process by Denmark's national intelligence agency.

News that Huawei Technologies Co. Ltd. had ousted Ericsson AB at the Danish incumbent was first revealed a month ago. (See Huawei Lands Major Deal at TDC .)

But now further details have emerged, including the value of the six-year deal -- US$700 million -- and the security hurdles over which the Chinese vendor had to jump: that Huawei landed the contract is a symbolic vote of confidence in the Chinese vendor from a western European incumbent.

Under the deal, TDC has turned over to Huawei the management and operation of its 2G, 3G, and 4G networks. It breaks new ground in measuring the vendor on customer experience metrics rather than just the traditional network performance targets.

But TDC group chief executive Carsten Dilling said it had gone ahead only after close scrutiny by the Danish Security and Intelligence Service, known as PET.

"We have invited them in [and] they have full transparency on everything we have agreed," Dilling told a media briefing in Shenzhen today.

As the incumbent, and with 70 percent of Denmark's business and government institutions as customers, security was a "substantial responsibility" for TDC. "I was not in a position to make this decision without involving the Danish authorities," stated the CEO. "We have had a very intensive process with the authorities investigating whether it was a good decision to go with Huawei equipment."

Dilling said the government agents were "hard core on security issues" and had introduced new procedures, which were now a part of the Huawei contract. "On the TDC side we feel that we learn a lot by having the intelligence services agency in, and we will keep them in as we are running this partnership."

Dilling said the decision to turn over "the most strategic part of our infrastructure" to Huawei was "the biggest decision I can make as CEO."

In addition to calling in security officials, TDC also sought the views of key customers about contracting out to Huawei.

Management of TDC's mobile network has been outsourced to Ericsson since 2008. Dilling said Huawei was chosen ahead of the Swedish firm this time because it is "a couple of steps further in guarantees."

Huawei has committed to ensuring that TDC's network will have the best user experience in the market, the best operational performance and the best network coverage. The contract sets specific indicators for each.

Dilling said Huawei had also won over his team by their expertise and technology quality, which was "on a par with the best in the world."

However, price was not the main factor: In fact, Huawei's bid was "quite expensive," added the CEO.

Ryan Ding, CEO of Huawei's carrier networks group, said Huawei senior executives had been "excited" by the contract because of its emphasis on customer experience.

Until now, the industry had focused on infrastructure quality, but with the TDC contract "we are looking more and more into the end-user."

Ding said Huawei would employ about 250 staff to service the contract and that it would create 100 new jobs in Denmark.

No TDC staff positions will be cut, but a number of Ericsson employees would be transferred to Huawei, Dilling said.

— Robert Clark, contributing editor, special to Light Reading

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DanJones 10/29/2013 | 10:15:43 AM
Re: Espionage Which would lead you to think that the NSA probably has some backdoor agreements either with the German secrect services, European carriers or network vendors; or any/all of the above. I have no idea which though, since this is all such a murky business.
James_B_Crawshaw 10/29/2013 | 6:26:49 AM
Espionage It doesn't seem that the NSA needed to supply the mobile network infrastructure to listen in to Angela Merkel's phone calls ...
sineira 10/25/2013 | 2:40:02 PM
Liquidated Damages I suspect the KPIs are tied to Liquidated Damages.
Very hard to actually enforce.

To buy a network based on a one-time (or x month) performance evaluation at the end of the build does not make sense.

Having KPIs in contracts tied to monetary or other values is nothing new.

R Clark 10/25/2013 | 2:05:18 AM
Re: Any chance this sets a precedent? Seems the sort of due diligence that all carriers should do. Bear in mind the case against Huawei is only theoretical. In all the gear it's installed installed in dozens of countries no-one has uncovered any backdoors, so you'd think TDC is on reasonably safe ground.

The customer experience metrics sound interesting. Basically it means TDC and Huawe are constantly war-driving around the country to make sure that the network coverage and the end-user quality are better than that offered by rival networks. If it works, it could be a new craze. If not, both of them could be in the tank. Ryan Ding from Huawei says other operators are interested in it, but none is anywhere near ready to commit to it.


Carol Wilson 10/24/2013 | 8:38:08 PM
Re: Any chance this sets a precedent? Somehow I don't think the Danes are walking into this with their eyes closed - even if the price was right, and we have to assume it was - won't they have thought of all of this? 
FbytF 10/24/2013 | 3:46:05 PM
Re: Any chance this sets a precedent? You hit the nail on the head. And to add, just because the equipment and software tested passed doesn't mean that's what will ship and install.  So to your point they must be planning to monitor constantly.  Are they really that gullible?
Liz Greenberg 10/24/2013 | 2:25:39 PM
Re: Any chance this sets a precedent? I have to wonder how they vetted millions of lines of code but more importantly, just because the current hardware and software passed security tests there is nothing to stop Huawei from adding code, re-routing calls, intercepting messages or anything else in the future unless the Danish Security folks will be monitoring constantly.  One still has to wonder about security.  Sorry to sound so negative but there are a LOT of ongoing possibilities to affect security.
acohn 10/24/2013 | 1:54:08 PM
Re: Any chance this sets a precedent?

Are they serious? 

"Huawei has committed to ensuring that TDC's network will have the best user experience in the market, the best operational performance and the best network coverage. The contract sets specific indicators for each."


How do you SLA this?

Carol Wilson 10/24/2013 | 8:50:53 AM
Any chance this sets a precedent? Can Huawei use this  to convince other countries its gear is not a threat to national security? If so, there could be a price war brewing.
R Clark 10/24/2013 | 8:30:58 AM
Re: Wonder what they tested.... Is it even possible to give the all-clear on millions of lines of code in network kit?

Still, sounds like a more realistic approach than, say, asking the opinion of Congress.


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