Deutsche Telekom is defending itself against the accusation that it had stashed Huawei components in order to evade American sanctions against the Chinese network equipment supplier. "This insinuation has no factual basis," said a company spokesman.

Helmut Bünder

Business correspondent in Düsseldorf.

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The dispute revolves around a contract from 2019. In it, the two companies are said to have agreed that Huawei will stock and manage important components in Europe. According to a report in the business newspaper "Handelsblatt", Deutsche Telekom wanted to protect itself against supply bottlenecks in this way after the US government had made it difficult to sell American technology to Huawei due to security concerns.

In Germany and most other European countries, the controversial Chinese network specialist nevertheless remained one of the most important suppliers for the expansion of the 5G network.

Most of the telecom business in the USA

The German network operators Telekom, Vodafone and Telefónica O2 banned him from the particularly security-relevant core network. However, the antenna technology still comes to a large extent from Huawei. In addition, the mobile phone companies rely mainly on Ericsson and Nokia. European or German import restrictions for Huawei components still do not exist. When it comes to purchasing, network operators are obviously operating on secure ground. "Deutsche Telekom emphatically rejects the allegation of circumvention of sanctions," the group said. Legal action would be considered. The fact that the group reacts so energetically could have to do with the fact that it does most of its business in the USA and cannot afford any reputational damage there.

Stockpiling important components is common, it was said in the industry. "We have a duty of care to ensure the secure and smooth operation of our networks," said the telecom spokesman without going into the Huawei contract. The company always strives to conclude contracts with all major manufacturers to ensure delivery capability. Details would not be disclosed "for competition reasons".

Dispute likely to flare up again at the beginning of April

The German authorities are now taking a closer look at Huawei, which has always rejected espionage allegations: New components have had to undergo a security test since 2021. The dispute is likely to boil up again at the beginning of April. Then, at the behest of the Ministry of the Interior, mobile operators must disclose which critical components are already installed in the existing networks. This will be followed by an ex-post safety assessment.

However, replacing components would be a technical challenge because 5G is based on existing networks and the components of different manufacturers are not compatible with each other. A subsequent Huawei ban also raises concerns within the German government. It will not be possible to simply expand everything again, Economics Minister Robert Habeck (Greens) said in an F.A.Z. interview: "The network must continue to function". So far, only 1&1 wants to completely do without technology from China in the construction of the planned fourth German mobile network.