Germany did not and will not give in to political pressure from the United States over Huawei's wireless business, Chancellor Angela Merkel said this week, clarifying that Berlin reached no final conclusions over the Chinese company's telecommunications technologies and its ambition to provide network operators on the old continent with 5G infrastructure and related solutions.
"There are two things I don’t believe in; first, to discuss these very sensitive security questions publicly, and second, to exclude a company just because it’s from a certain country," Merkel said in the German capital on Tuesday.
Germany has been under significant pressure from Washington over its 5G plans in recent months; even outside of diplomatic endeavors, German companies have been made aware of the U.S. stance on Chinese telecom tech in no uncertain terms.
Washington-Berlin relations took a turn for the worse earlier this month precisely because of Huawei after U.S. envoy threatened Europe's strongest economy over its continued use of Chinese telecom tech.
Despite Chancellor Merkel's latest remarks on the matter, the U.S. already scored one major win in its efforts to cripple Huawei by having Deutsche Telekom agree to drop its equipment in favor of accelerating an all-encompassing review of its subsidiary T-Mobile's merger proposal launched with SoftBank's Sprint. That particular development, announced in December, surprised some industry watchers as not everyone expected DT to fold so easily when it comes to Huawei, though it also didn't stop all critics from continuing to demand the stateside carriers provide the general public with written assurances they won't use Huawei technologies in their future 5G networks.
While the Chinese conglomerate's wireless equipment is largely matched by solutions from Ericsson and Nokia, what's unprecedented is its scale, especially in terms of in-house manufacture. Coupled with the low cost of labor in China relative to most other parts of the world, especially those with the technical know-how necessary for flow-producing such devices, and the reason why Huawei is the world's largest telecom equipment manufacturer becomes clear – no one can match its prices and survive long enough to tell the tale. Its solutions are hence an extremely attractive proposition for every wireless business on the planet as no one wants to lose money or e.g. explain to investors why some deployment cost an X amount of money if Huawei offered a 10-percent cheaper alternative.
That's also why the U.S. had difficulties with convincing its allies to drop Huawei gear as the tensions between Washington and Beijing continued to rise in previous months, reaching a new level of hostility around the turn of the year after the stateside Justice Department had Canadian authorities arrest Huawei CFO Meng Wanzhou under suspicion of various financial crimes as part of one of the most bizarre diplomatic incidents in recent memory. To date, only Australia truly did what the U.S. is asking for – outlawed any possibility of Huawei-made or other Chinese tech being used in its incoming 5G deployment efforts.
The likes of Canada, Japan, South Korea, and Germany have all been reported to be considering banning Huawei equipment in the past but none have yet pulled the trigger on the decision that would likely spike their medium-term infrastructure costs by hundreds of millions of dollars.
At the same time, the U.S. remains adamant that installing Huawei's solutions means inviting China to spy on you in your backyard, arguing the Shenzen-based firm has no hope — legal or otherwise — of resisting any kind of foreign customer information requests, no matter how broad or unjustified they are.