For the past few months, Europe's biggest telecom operator has been acting as if a German ban on Huawei, the controversial Chinese vendor under sustained US attack, is not even a remote possibility.

A Deutsche Telekom 5G network comprising more than 30,000 antennas now blankets Germany, covering around 40 million people, half the entire population.

Indications are that most if not all of this network was built by Huawei.

It already had contracts for nearly two-thirds of Deutsche Telekom's German radio access network (RAN), according to data from advisory group Strand Consult. And Ericsson, the other RAN provider, had not even started its 5G buildout in July, according to its own statement about a 5G contract award.

Figure 1: Deutsche Telekom's Timotheus Höttges is confident Germany will not ban Huawei.

The worst-case scenario – what Deutsche Telekom dramatically described as "Armageddon" in a leaked paper, according to earlier reports – would be a total ban, akin to a recent government decision in the UK.

Depending on the timeframe, that would force the German incumbent to rip out both 5G and linked 4G equipment at some expense and introduce a new supplier. The rush to invest in Huawei's 5G technology this year would appear a costly and regrettable mistake.

A political decision is expected soon and Deutsche Telekom CEO Timotheus Höttges remains confident.

"It looks as if there is no intention of expressly excluding any other providers," he told reporters on a phone call this morning.

At the same time, however, he is calling for new rules that would effectively exclude Huawei from Germany's RAN market unless it were to change its entire philosophy.

O-RAN mandate
Höttges wants Germany's government to mandate the use of open RAN (O-RAN) technology in future.

"The Telecommunications Act and the IT Act need to be amended in certain regards," he said.

"I think it would be good if these amendments also cover open RAN regulations for the access network. We need some statutory rules and they should be mandatory for all equipment providers."

By opening up the technical interfaces between different RAN components, this new and in-vogue technology would allow operators to combine products from several vendors at the same mobile site.

O-RAN promises a more software-based and potentially lower-cost network. Right now, it would also rule out Huawei.

Of the big three RAN equipment suppliers – Ericsson, Huawei and Nokia – the Chinese vendor has been the most decidedly unenthusiastic about O-RAN technology.

"O-RAN is far behind in performance," said Victor Zhang, Huawei's head of global government affairs, when grilled by UK politicians last month, days before his company was hit with a ban.

While Nokia is already marketing products it says are O-RAN-compliant, Huawei is standing firmly by its heavily customized gear.

Want to know more about 5G? Check out our dedicated 5G content channel here on Light Reading.

Much like Ericsson, which has warmed slightly to O-RAN as operators demand it, Huawei sounds less resistant than it did even a year ago.

"Once it has compatible performance, we believe we will be one of the best suppliers," Zhang told the UK parliamentary committee during his interrogation.

Yet O-RAN, by its very nature, would not suit Huawei's modus operandi.

Deemed a security threat by the US, the Chinese vendor rose to RAN ascendancy in the 4G era by flogging so-called "single RAN" products, supporting 2G, 3G and 4G all on the same platform.

It is this single RAN technology that has made replacing Huawei so fiendishly awkward. As the world's largest RAN vendor, Huawei also has more to lose than its rivals from an O-RAN shake-up.

Another problem for Huawei is that O-RAN entails the use of a more complex ecosystem of suppliers.

Ensuring they all work together nicely could be a job for the operator or a systems integrator. Yet in the O-RAN future, different suppliers will probably need to collaborate more than they do today.

Unless the political climate changes, non-Chinese vendors may be wary of partnerships with Huawei as this O-RAN swap-out begins.

Anti-Chinese sentiment
Germany might not be the only company to mandate the use of O-RAN technology.

A group called the Open RAN Policy Coalition took shape this year with the express purpose of evangelizing O-RAN to government authorities. With not a single Chinese member, it appears vehemently anti-Chinese.

Deutsche Telekom is not yet a member of the group, but Spain's Telefónica and UK-based Vodafone have joined. And Höttges seemed to allude to it in his remarks earlier today.

Unfortunately, few technology experts think O-RAN will be ready for commercial deployment in busy urban areas for several years. They share Huawei's concerns about the performance limitations of the still-immature technology.

Japan's Rakuten is perhaps the only company in a highly developed telecom market to have made O-RAN investments. But Rakuten is building its network from scratch, and it still caters to only 1 million or so customers.

In the meantime, Höttges has played down Deutsche Telekom's dependence on Huawei.

"As part of our network infrastructure, 35% of all our jobs go to the States, 25% go to Asia, another 25% goes to Europe and the rest is scattered around the world," he said. "For all components, we have two, three, sometimes even four providers we can choose from."

But this rosy assessment obscures the fact that across much of Germany Huawei is the only provider of RAN technology.

Although traditional replacements for 2G to 5G technologies are available in the form of Ericsson and Nokia, neither is ideal.

Handing that job to Ericsson would make Deutsche Telekom entirely dependent on it in Germany.

Told to clear out in late 2017, Nokia previously served the areas Ericsson is responsible for today. If it was unhappy with the Finnish company then, Deutsche Telekom is unlikely to feel very positive about it just three years later.

In the sensitive "core" network, Deutsche Telekom is also understood to have relied on Huawei.

Amid political concerns about having Chinese vendors in this part of the network, Höttges previously said he was working to develop a "Chinese-free" core. Today, he suggested the job was done.

"The actual core network, where we see the whole aggregation, of course has a lot of US components that we are using," he said on today's call. "There, we are not using Chinese suppliers."

Observers will be skeptical. The UK's BT does not expect to complete a similar core network transition, replacing Huawei with Ericsson, until 2023.

Technology experts have told Light Reading that swapping one vendor for another in this part of the network is an extremely complex task that can take several years.

Regardless of the core network status, Höttges must hope he is right about the political intentions.

If Germany's government decides not to ban Huawei but agrees to mandate open RAN, it could present that as a way of minimizing risk and even excluding Chinese vendors in future.

That would give Germany's biggest operator the time it needs for an O-RAN overhaul.

Related posts:

— Iain Morris, International Editor, Light Reading