DT defends Huawei exposure as the heat rises

The German press and politicians are up in arms over Deutsche Telekom’s relationship with Huawei, but the telecoms group is attempting to ease tensions and add distance from the vendor.

After local news outlet Handelsblatt hinted the relationship between the telecoms operator and the vendor was deepening, politicians began to rage.

“If there is indeed a high degree of dependence of Telekom on Huawei in the expansion of the 5G network, this would be very problematic,” Thorsten Frei of the Christian Democratic Union said.

“Telecom sits clear, it owes us parliamentarians an explanation,” said Falko Mohrs, representing the Social Democratic Party.

Realistically, these are individuals attempting to jump on the band wagon and hype themselves more than anything else, as few should be surprised there is a relationship between DT and Huawei. The telecoms operator has not been covert, but the team has felt it necessary to put out a statement clarifying the position and adding some distance between itself and controversy.

The statement reiterates the implementation of a multi-vendor strategy, with 30% of technology purchases being from US tier one firms, 25% from European and Chinese tier one vendors, and the remainder made up of smaller Asian and local suppliers. The telco has also said purchases from Huawei has declined over the last three years, though as backwards compatibility is a challenge, Ericsson and Huawei will be leading 5G network deployment. This should not be seen as a surprise, however.

Moving forward, DT has said it is aiming to drive more competition in this segment of the business and is therefore supporting the progress of OpenRAN, but its cloud operating system is also based on Open Stack. Theoretically, its cloud service is independent of hardware suppliers, while Huawei supplies preconfigured standard x86 servers.

Although the technologists in the room are not embarrassed by the relationship with Huawei, the corporates might be. Germany has not been the most hostile towards the Chinese vendor in recent months, but the tides do seem to be shifting across Europe. Increased bureaucratic action taken against Huawei in the US is having a material impact on Huawei’s relationships today, and we suspect this is just the tip of the iceberg.

If you are a telco which is exposed to Huawei, the next few months might be uncomfortable, but if you are a tier one rival or an ambitious OpenRAN company, the European landscape is starting to look very favourable.