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Chinese telecom companies Huawei and ZTE feel the squeeze as EU restricts them from 5G networks

Classifying them as “high-risk vendors,” EU commissioner said that the EU cannot afford to depend on the two companies as they could become “weapons” against EU’s interests.

On June 15, the European Union (EU) announced that it supports the decision of multiple member states to restrict Chinese telecom companies Huawei and ZTE from 5G networks classifying them as “high-risk vendors” and that as a result, it considers the two to have materially higher risks than other 5G suppliers. This decision comes as the EU publishes its second progress report on implementing the EU Toolbox on 5G cybersecurity. This toolbox came into force in 2020 and provided a set of measures to mitigate the main cybersecurity risks of 5G networks.

“We can’t afford to maintain critical dependencies [on Huawei and ZTE] that could become a “weapon” against our interests. That would be too critical a vulnerability and too serious a risk to our common security,” said Thierry Breton, The European Commissioner for Internal Market when discussing the restriction. 

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Why it matters:

According to the EU, the commission will now take measures to avoid exposure of its corporate communications to mobile networks using Huawei and ZTE as suppliers. It will also make sure not to procure new connectivity services that rely on equipment from these suppliers and will work with its member states and telecom operators to make sure that those suppliers are progressively phased out from existing connectivity services of the EU sites. All of this can significantly hamper the two companies’ businesses not just in the region but across the globe because of the negative light it puts them under. 

Another entry in the long list of regulatory actions against Chinese companies:

It is worth noting that the EU isn’t the first to point to these companies as cybersecurity threats. Chinese tech companies have been under the microscope across the world because of fears that they work with the Chinese intelligence and military. In 2022, both Huawei and ZTE (among other Chinese telecom companies) were also banned by the US Federal Communications Commission (FCC) for posing an unacceptable risk to national security.  

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Similarly, while there is no clear ban against Huawei and ZTE in India, there have been attempts to regulate their presence in the telecom market. In 2022, the Indian government directed telecom service providers (TSP) to only use equipment that bears a ‘Trusted Products’ mark for network expansion, and according to the Economic Times, this trusted products tag was not provided to the two companies. 

Response to the EU’s restriction:

According to Reuters, China firmly opposes EU countries’ ban on Huawei and says that the EU’s restriction has no factual evidence or legal basis to it. Huawei agrees with China’s stance on the matter and adds that publicly singling out an individual entity as a high-risk vendor without a legal basis is against the principles of free trade. On the other hand, ZTE welcomes any external assessment of its products by regulators but says that it wants to be treated just like any other vendor. 

This post is released under a CC-BY-SA 4.0 license. Please feel free to republish on your site, with attribution and a link. Adaptation and rewriting, though allowed, should be true to the original.

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