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Huawei ousted from heart of EU as Nokia wins Belgian 5G contracts

Huawei, the world's biggest telecoms equipment supplier, strongly denies the US allegations and has been highly critical of calls to ban it from 5G contracts

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Huawei | Nokia

Supantha Mukherjee & Mathieu Rosemain | Reuters  |  Stockholm/Paris 

Huawei
Huawei

Orange and Proximus have picked to help build networks in Belgium as they drop amid US pressure to exclude the Chinese firm from supplying key telecoms equipment.

The moves are among the first by commercial operators in Europe to drop from next-generation networks and come after months of diplomatic pressure from Washington, which alleges equipment could be used by Beijing for spying.

The Belgian capital Brussels is home to the NATO alliance and the European Union's executive and parliament, making it a matter of particular concern for US intelligence agencies.

"Belgium has been 100% reliant on Chinese vendors for its radio networks - and people working at NATO and the EU were making mobile phone calls on these networks," said John Strand, an independent Danish telecoms consultant.

"The operators are sending a signal that it's important to have access to safe networks."

The United States welcomed the decisions by Orange Belgium and Proximus, which have a network sharing agreement.

"This is the latest example of evaporating Huawei deals and further confirmation of this worldwide momentum towards trusted vendors," said Keith Krach, the US undersecretary at the State Department for economic growth, energy and the environment.

Huawei, the world's biggest telecoms equipment supplier, strongly denies the US allegations and has been highly critical of calls to ban it from contracts.

However, it said on Friday it accepted the decisions by Orange Belgium and Proximus, which confirmed an earlier Reuters exclusive.

"This is the outcome of a tender organised by operators and the result of the free market," a Huawei spokesman said.

"We embrace fair competition, the more diversified a supply chain the more competitive it becomes," he said, adding Huawei had been supplying equipment in Belgium for more than a decade and its commitment remained unchanged.

The decisions leave Liberty Group's Telenet as the only mobile carrier in Belgium yet to say which supplier it will use for its next mobile networks. Telenet currently relies on equipment made by China's ZTE, and plans to announce its decision in the first half of 2021, a spokeswoman said.

Closer Scrutiny

The deals to supply radio gear to Orange Belgium and Proximus are a boost for Nokia, which struggled to make headway in the 5G market earlier this year even as Huawei was under pressure.

"I have tried to become RAN (radio access network) supplier to Orange Belgium since 2003 when the company was still Mobistar. Here we are, finally," tweeted Tommi Uitto, president of Mobile Networks.

The did not disclose a value for the contracts.

shares were up 3% in afternoon trading.

Orange Belgium and Proximus said Ericsson would supply the core of their 5G networks, a smaller slice of business.

EU members have been stepping up scrutiny of so-called high-risk vendors. This subjects Huawei's governance and technology to critical examination and is likely to lead other European operators to strip it from their networks, analysts say.

Nokia and Ericsson have been the main beneficiaries of the challenges facing Huawei. From Bell Canada and Telus Corp in Canada to BT in Britain, the Nordic have been grabbing market share from the Chinese firm.

Separately, Nokia said it had won a contract to provide data management software to Telefonica UK, which said the Finnish firm would replace the less than 1% of Huawei kit in its network.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Fri, October 09 2020. 19:51 IST
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