Strand Consult revealed the devil in the Huawei details
The EU is to harden its stance on the security threat posed by Chinese equipment at the heart of Europe’s vital telecoms infrastructure, according to Mobile Europe’s sources. Insiders close to EU policymakers say regulators have struggled to visualise the depth and scale of Europe’s exposure because they lacked ‘visibility’, in terms of both the finer details and wider context. All that changed on May 31, when EU Competition Commissioner Margrethe Vestager (pictured) hinted that the EU may have become better informed and more focused. According to one source, it was the latest bulletin from Strand Consult, that made the scales fall from some policy maker’s eyes and gave them clarity for the first time.
Huawei up
EU policy makers met last week in Lisbon to discuss Portugal’s decision to completely ban technologies from the Chinese company Huawei from its 5G network provoked an immediate response, reports Germany’s WirtzSchafWoche. Citing Chinese government sources, the news site said China is “ready to take political action against Portugal and use its influence against its [largest] companies such as EPD, REN, Mota-Engil, and BCP.” EU Competition Commissioner Margrethe Vestager reportedly suggested a hardening of resolve on the matter. “I commend Portugal’s Cybersecurity Committee for their thoughtful implementation of the EU 5G security toolbox,” said Vestager, “threats have no place and will not prevent Europe from taking legitimate measures to protect its critical infrastructure.”
Recrimination
Portugal’s stance risks recriminations from China. Beijing was reportedly surprised by Portugal’s decision against Huawei’s mobile network components, which it interpreted as ‘harsher” than those of other European countries, according to Portugese news outlet Jornal de Negocios. China is Portugal’s fourth-largest foreign investor, supporting it with €11.22 billion in 2022. State-owned China Three Gorges holds 20% of Portugal’s largest company, the energy provider Energias de Portugal (EDP). The State Grid Corporation of China controls 25% of the energy network operator REN. The Chinese conglomerate Fosun International has held 30% of the largest Portuguese bank, BCP, since 2014 and controls the largest insurer, Fidelidade, with an 85% stake, as well as the largest hospital operator, Luz Saude, through Fidelidade. China Communications Construction holds 32.4% of the construction company Mota-Engil.
Blind trust
In the days running up to the decision, Strand Consult (SC) presented the Portugese with the most detailed report yet on the penetration of Chinese units into Europe’s telecoms infrastructure. The report The Market for 5G RAN in Europe: Share of Chinese and Non-Chinese Vendors in 31 European Countries is a follow up an earlier report Understanding the Market for 4G RAN in Europe: Share of Chinese and Non-Chinese Vendors in 102 Mobile Networks from 2020. The report criticised much of the information that EU policymakers have relied on which have often been sponsored by the equipment vendors supposedly under scrutiny. “The picture that government policymakers need for their decision making is so obscured that it’s practically useless,” said SC founder, analyst John Strand, “There [has been] little transparency about the amount, type, location, and share of 4G and 5G Chinese equipment in European networks.”
Visibility
The report reveals that, despite some rip and replace initiatives, there are still eight out of 31 EU countries whose 5G RAN comprises a majority of Chinese equipment. In one country, 100% of the 5G RAN comes from Chinese vendors. Just 11 in 31 European countries can offer their users access to ‘clean, non-Chinese networks’, said the report, and the apex European nation, Germany, along with Italy, Poland, Portugal, Austria and Spain, still buy significant amounts of 5G equipment from Chinese vendors. According to Strand, factions within the German coalition government are sympathetic to the Chinese regime and have resisted sanctions against Chinese vendors because this would affect German car exports.
German write off
In 2020, 57% of Germany’s 4G RAN came from Chinese vendors. In 2022, 59% of the 5G RAN in Germany comes from Chinese vendors. Since Germany accounts for 25% of European mobile customers, the German government’s lax approach to communications infrastructure creates a risk for Germany and all people who interconnect with German networks, the report said. Sixty per cent of 5G antennas installed in Germany come from Huawei and in some regions all equipment is from Huawei.
Network Nord Stream
“The data suggests that Germany appears not to take the security threat of China seriously, which has echoes of Nord Stream 2, the oil supply pipeline from another seemingly rogue state, Russia, that has ended in disaster. It appears that Germany has set up a similar scenario in the communications domain with Huawei and ZTE,” said the report. If China were to invade Taiwan, any threatened EU sanctions would be undermined by the fact that China has the doomsday option to stun Europe at the click of a kill switch, Strand told EU policy makers in Lisbon. “The message is sinking in now,” said Strand.