US Markets

Telefonica Deutschland: We have 5G backup plan in case of Huawei ban

Telefonica Deutschland said on Wednesday it had taken steps to ensure it can build its 5G mobile network should China's Huawei Technologies [HWT.UL] be excluded from the German market on national security grounds.

By Douglas Busvine

BERLIN, July 29 (Reuters) - Telefonica Deutschland O2Dn.DE said on Wednesday it had taken steps to ensure it can build its 5G mobile network should China's Huawei Technologies HWT.UL be excluded from the German market on national security grounds.

The leading national mobile operator by customer numbers last year struck preliminary deals with Huawei and Nokia NOKIA.HE to build its 5G radio access network, which it plans to launch towards the end of 2020.

This is subject to certification of the vendors under rules that have not yet been finalised. As a back-up, Telefonica Deutschland has signed contracts with other suppliers who could step in if Huawei is excluded, CEO Markus Haas said.

"We have contracts with all the main vendors and would be in a position to make a switch within a few weeks," Haas told reporters on a conference call after Telefonica Deutschland reported a 5% drop in second quarter profits.

Telefonica Deutschland's wait-and-see approach contrasts with that taken by Deutsche Telekom DTEGn.DE, which has pressed ahead with building its 5G network largely on the basis of its existing agreements with Huawei.

Deutsche Telekom said this week its 5G network now reached 40 million people in Germany - nearly half the population.

Huawei faces an uncertain future in Europe after Britain decided to purge its equipment from 5G networks by 2027, siding with the United States in assessing it as a national security risk. Huawei denies it is such a risk.

German Chancellor Angela, under pressure from lawmakers to pursue a similar course, has put off a decision on Huawei until after the summer break.

Haas said Telefonica Deutschland would press ahead with its 5G strategy, which foresees covering Berlin, Hamburg, Munich, Cologne and Frankfurt this year. By the end of 2021, its 5G will be in 30 cities covering 16 million people.

He added that Telefonica Deutschland had chosen Ericsson ERICb.ST of Sweden to deliver its 5G network core.

(Reporting by Douglas Busvine; Editing by Mark Potter )

((douglas.busvine@tr.com; +49 30 220 133 562; Reuters Messaging: douglas.busvine.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

TEF

Latest Markets Videos

Reuters

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

Learn More