Federal government threatens network operators with expansion requirements

Hamburg, Brussels, Berlin The federal government could soon force German telecommunications providers to remove Chinese components from their mobile networks. According to Handelsblatt information, the Ministry of the Interior reserves the right to instruct network operators to remove critical components from “untrustworthy” manufacturers – even if they are already in operation.

The use of components that have already been installed can be prohibited “if further use is likely to affect public order or security in the Federal Republic of Germany, especially if the manufacturer of the critical component is not trustworthy,” the ministry confirmed on request. Such an “ex-post ban” could “also include the expansion of the respective components”.

Industry jargon speaks of “rip and replace”: network components from Chinese manufacturers such as Huawei and ZTE would have to be replaced with components from the Scandinavian suppliers Ericsson and Nokia. Such an obligation to exchange would pose considerable problems for the mobile network operators Deutsche Telekom, Vodafone and Telefónica Deutschland (O2): A conversion would be expensive and would probably delay the construction of the new, ultra-fast 5G networks.

The components of the major network suppliers are not always compatible with one another. In many cases, the removal of a component would necessitate extensive retooling. This is one of the reasons why the Ministry of the Interior cannot issue such instructions on its own. It must be coordinated with the departments concerned, such as the foreign and economic ministries, it said.

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If it were up to the network operators, Huawei would provide around 60 percent of the 5G network technology, as calculations by the consulting firm Strand Consult show. Depending on the operator, the share of Huawei components in the 4G network is up to 65 percent today.

FDP advises extreme caution in the Huawei case

Upon request, Huawei lets it be known that the company is not aware of any plans to exclude its own components. The Chinese group certifies itself an “excellent safety record”.

Vodafone only states that it uses technology from several providers in its antenna network (4G and 5G) – “including from Huawei”. Telefónica makes a similar statement, but does not name Huawei specifically. A secure network has “top priority” for the people of Munich. Telekom initially did not want to answer a Handelsblatt query. When asked, a spokesman referred to earlier information from the group regarding the Huawei share in the Telekom network. According to this, the group uses Huawei components in the antenna access network, but “removes” Chinese technology from the core network.

The decision as to whether critical components from Huawei and ZTE are not trustworthy has not yet been officially made. However, under the impact of the Russian aggression against Ukraine and the Kremlin’s attempts to blackmail Germany by cutting gas supplies, the German government is reassessing the risks of economic ties with dictatorships.

Interior Minister Nancy Faeser (SPD) is critical of dependencies on Chinese technology. When asked whether the government had already refused the use of a certain network component, the Interior Ministry referred to “ongoing proceedings” without providing any further information.

Huawei logo

The Chinese group certifies itself an “excellent safety record”.

(Photo: imago images/Passion2Press)

The FDP advises extreme caution in the Huawei case. “It would be unworldly and naive not to recognize the geopolitical importance of Huawei’s activities in Germany for China’s influence,” parliamentary group leader Konstantin Kuhle told the Handelsblatt. There are “significant” concerns with regard to cyber security.

“Against this background, it is right that German authorities are re-examining the risks of using Huawei components,” emphasized Kuhle. “Germany must not make itself dependent on dictatorships.”

>> Read here: “It’s about our national security”: Canada bans 5G technology from Huawei

Green parliamentary group leader Konstantin von Notz sees it the same way. “In view of the developments in Ukraine and the terrible gas misery in Europe, it should have become clear to everyone that one should not give oneself up to dictatorships with an imperialist attitude if possible, so as not to become vulnerable to blackmail,” von Notz told the Handelsblatt. This is particularly true in sensitive areas such as energy supply, but also in the IT infrastructure.

NATO also sees dangers from Chinese technology

Von Notz, who is also chairman of the secret service committee of the Bundestag, therefore considers it logical to put existing cooperation to the test. “Rip and Replace is not yet a concept to face these enormous challenges,” he added. “In the end, neither Europe nor Germany will be able to avoid becoming more independent, self-sufficient and sovereign – also in the area of ​​IT infrastructure.”

>> Read here: Stagnating sales, frustration among bosses: The side effects of China’s tech regulation

The legal basis for state intervention is the so-called IT Security Act 2.0, which was passed at the end of the last legislative period after long controversy. The law does not provide for a fundamental decision on the approval of Chinese network equipment suppliers, but rather individual reviews for “critical components”.

To do this, it formulates criteria that Chinese manufacturers can hardly meet given the state intervention that is common in the country. According to the Ministry of the Interior, “when examining an expected impairment of public order” it can be taken into account whether the manufacturer is “directly or indirectly” controlled by the government of a third country, whether the manufacturer “has already been involved in activities” that affect the safety of the Germany and its closest allies have harmed, and whether “the use of the critical component is consistent with the security policy goals of the Federal Republic of Germany, the European Union or the North Atlantic Treaty”.

FDP parliamentary group leader Konstantin Kuhle

“Germany must not make itself dependent on dictatorships.”

(Photo: IMAGO/Political Moments)

NATO has just pointed out the dangers of Chinese technology in its new security concept. In their strategic guidelines, the NATO partners warn that China is striving to “take control of key technological and industrial sectors, critical infrastructure and strategic materials and supply chains”.

The network operators have so far taken the position that it would be enough to ban Huawei and ZTE from the so-called “core network”, where large amounts of data are processed. In the “access network”, which consists of antennas and base stations distributed across the country, the risks are manageable.

Vodafone and Telefónica trust in Swedish supplier Ericsson

The network operators are emphasizing that they will no longer use Huawei components in their 5G core networks. For example, Telefónica relies on the Swedish supplier Ericsson. Vodafone had also signed a contract with the provider.

However, the Ministry of the Interior is now emphasizing that there is no legal distinction between core and access networks. “Rather, the definition is based on critical functions, which are to be considered independently of the place of implementation within the network,” explains a spokesman. The announcement by the network operators that they will not use Chinese components in the core network will therefore hardly be sufficient to meet the legal requirements.

The regulations also do not only apply to the 5G network, which is currently still being set up. The regulations “from the point of view of the Federal Ministry of the Interior also include the 4G network, insofar as this underlies the 5G network, for example in a so-called hybrid network structure”.

SPD foreign politician Nils Schmid, who is one of the driving forces in the Huawei debate, therefore emphasizes: “The law has bite. It is now up to the federal government to draw the necessary conclusions for national security.” The coalition factions expected a quick decision.

For a long time, the public discussion about Huawei mainly revolved around the accusation that the company’s technology could be used by Chinese intelligence services for espionage. There are signs of this, but no court-proof evidence. More important for the security policy considerations of the ministries is whether network operation can be maintained if China uses the delivery of software updates as a means of political pressure – as Russia is currently using the delivery of gas.

“We have a problem with dependence on Russian gas, but a number of EU countries, including Germany, are also dependent on Chinese technology,” said John Strand, head of consultancy Strand Consult. In Germany, no network is operated without Chinese components, which makes the Federal Republic vulnerable to blackmail.

In neighboring France, network operators were informed by the government two years ago that licenses for Huawei equipment would not be renewed. This results in a continuous “phasing-out” of Chinese technology.

More: “It’s about our national security”: Canada bans 5G technology from Huawei.

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