Deutsche Telekom reviews vendors in light of China security debate

FRANKFURT (Reuters) - Deutsche Telekom, Europe's largest telecoms company, said on Friday it was reviewing its network vendor strategy in light of a debate on the security of Chinese network equipment that it was taking "very seriously".

The reassessment by Telekom, in which the German state owns a stake of nearly a third, comes after some U.S. allies excluded Chinese equipment maker Huawei on national security grounds.

"Deutsche Telekom takes the global discussion about the security of network equipment from Chinese vendors very seriously," the company said in response to a Reuters query.

Telekom already pursues a multi-vendor strategy, relying above all on equipment from Ericsson, Nokia, Cisco and Huawei. "Nevertheless we are reassessing our procurement strategy," Telekom said.

The shift is significant because, so far, German officials have said they see no legal basis to exclude any vendors from the buildout of fifth-generation networks in response to warnings from Washington that Huawei's networks were not safe.

U.S. officials have briefed allies in recent months that Huawei is ultimately at the beck and call of the Chinese state, while also warning that its network equipment may contain "back doors" that open them up to cyber espionage. Huawei denies this.

Telekom, for its part, has had a close relationship with Huawei, which is the world market leader in network gear and number two in smartphones. The two are conducting a pilot project in Berlin ahead of the auction of German 5G licences in 2019.

Nearly half of the German company's revenues come, however, from its profitable and fast-growing U.S. unit T-Mobile, which is undergoing regulatory scrutiny of its $26 billion bid to take over Sprint Corp.

(Reporting by Douglas Busvine; editing by Thomas Seythal and Gopakumar Warrier)