Another Setback For Telecom Chinese Suppliers

Huawei is facing more setback after Japan, Europe’s biggest foreign market, where some countries are starting to shun its network systems over data security concerns.

European telecom companies and governments are following the U.S.’s lead in raising the question whether to use Huawei for vital infrastructure for mobile networks could leave them exposed to snooping by the Chinese government.

European’s ban could increase the financial strains on Huawei. It may cost tens of billions of dollars as the region looks to build up “5G” networks, that could support a vast expansion in internet-connected things.

“Europe is still divided over Huawei, but the trend line is moving in a fairly clear direction” as the U.S. exerts pressure on allies to block it, said Thorsten Benner, director of the Berlin-based Global Public Policy Institute think tank.

Geopolitical tensions over Huawei intensified after its chief financial officer, who is also the daughter of founder Ren Zhengfei, was arrested Dec. 1 in Canada in connection with U.S. accusations that the company violated restrictions on sales of American technology to Iran.

Huawei has been blocked in the U.S. since 2012 when the House Intelligence Committee report found it was a security risk and recommended that the government and private companies stop purchasing its network equipment.

German Deutsche telekom said it will take the global discussion about security of network elements from Chinese manufacturers very seriously. They are currently reevaluating their procurement strategy.

Deutsche telekom has been in the past the biggest supporter of Huawei, based on its cheap and reliable equipment.

This came just after Alex Younger, the director of Britain’s Secret Intelligence Service, or MI6, said in a speech that Britain needs “to decide the extent to which we are going to be comfortable with Chinese ownership of these technologies” according to local media reports.

British Telecom is removing Huawei equipment from key parts of its current 3G and 4G networks as part of an internal policy not the use for core infrastructure, which will also apply to 5G networks. France Telecom Orange CEO Stephane Richards said it will not use Huawei gear for sensitive parts of its network.

Norway’s telecom is considering clarifying requirements from network operators. Belgium’s cybersecurity agency is considering a ban on Huawei. Czech Republic’s prime minister ordered its government to stop the purchase of Huawei mobile phones after the national cybersecurity agency warned that Huawei products and other Chinese telecom company could pose a security threat.

The European Union’s head of technology policies, Andrus Ansip, stated “we have to worried” about possible security risks from Huawei when asked about the company role in European 5G and driverless car projects.

As Chinese Manufacturers are facing setback around the world, opportunities are now open for any manufactures to gain world market shares.