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Telefonica Deutschland chooses Huawei for 5G project

By Hugh Wilson

German telecom company picks Chinese supplier to build new infrastructure despite security concerns

Huawei has been chosen to help build Germany’s 5G telecoms network, despite concerns about the company’s links to the Chinese government.

Telefonica Deutschland, part of the Spanish Telefonica group, operates Germany’s second largest wireless network. It said in a statement that it will use Finnish company Nokia and Huawei to build part of the new infrastructure.

The deal still has to be approved by German authorities. The US government has banned Huawei from involvement in telecoms infrastructure amid allegations that its equipment could be used for spying. Huawei has repeatedly denied this.

The seal of approval from Telefonica Deutschland comes at a difficult time for Huawei’s European ambitions. Rival Deutsche Telekom AG froze orders of 5G equipment last week because of worries over Chinese suppliers.

Telefonica Deutschland's statement said it is “taking into account the ongoing political process of establishing these security guidelines without delaying the start of the 5G expansion”.

Deals with both Huawei and Nokia “will be subject to the successful safety certification of the technology and the companies,” it added.

Telefonica Deutschland is not the first European operator to engage Huawei to help build 5G infrastructure. Switzerland’s Sunrise launched its Huawei-powered 5G network this year.

Shares in Telefonica Deutschland fell in early trading on Wednesday, after it indicated in a strategy update that it would cut 2019 dividends by 37 per cent to help fund network investments.

FURTHER READING: Huawei suffers as US security sanctions bite

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