Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Huawei ousted from heart of EU as Nokia wins Belgian 5G contracts

Published 09/10/2020, 15:08
Updated 09/10/2020, 17:50
© Reuters. The EU flag and a smartphone with the Huawei and 5G network logo are seen on a PC motherboard in this illustration

© Reuters. The EU flag and a smartphone with the Huawei and 5G network logo are seen on a PC motherboard in this illustration

By Supantha Mukherjee and Mathieu Rosemain

STOCKHOLM/PARIS (Reuters) - Orange and Proximus have picked Nokia (HE:NOKIA) to help build 5G networks in Belgium as they drop Huawei amid U.S. pressure to exclude the Chinese firm from supplying key telecoms equipment.

The moves are among the first by commercial operators in Europe to drop Huawei from next-generation networks and come after months of diplomatic pressure from Washington, which alleges Huawei equipment could be used by Beijing for spying.

The Belgian capital Brussels is home to the NATO alliance and the European Union's executive and parliament, making it a matter of particular concern for U.S. intelligence agencies.

"Belgium has been 100% reliant on Chinese vendors for its radio networks - and people working at NATO and the EU were making mobile phone calls on these networks," said John Strand, an independent Danish telecoms consultant.

"The operators are sending a signal that it's important to have access to safe networks."

The United States welcomed the decisions by Orange Belgium and Proximus, which have a network sharing agreement.

"This is the latest example of evaporating Huawei deals and further confirmation of this worldwide momentum towards trusted vendors," said Keith Krach, the U.S. undersecretary at the State Department for economic growth, energy and the environment.

Huawei [HWT.UL], the world's biggest telecoms equipment supplier, strongly denies the U.S. allegations and has been highly critical of calls to ban it from 5G contracts.

However, it said on Friday it accepted the decisions by Orange Belgium and Proximus, which confirmed an earlier Reuters exclusive.

"This is the outcome of a tender organised by operators and the result of the free market," a Huawei spokesman said.

"We embrace fair competition, the more diversified a supply chain the more competitive it becomes," he said, adding Huawei had been supplying equipment in Belgium for more than a decade and its commitment remained unchanged.

The decisions leave Liberty Group's Telenet as the only mobile carrier in Belgium yet to say which supplier it will use for its next mobile networks. Telenet currently relies on equipment made by China's ZTE (HK:0763), and plans to announce its 5G decision in the first half of 2021, a spokeswoman said.

CLOSER SCRUTINY

The deals to supply radio gear to Orange Belgium and Proximus are a boost for Nokia, which struggled to make headway in the 5G market earlier this year even as Huawei was under pressure.

"I have tried to become RAN (radio access network) supplier to Orange Belgium since 2003 when the company was still Mobistar. Here we are, finally," tweeted Tommi Uitto, president of Nokia Mobile Networks.

The companies did not disclose a value for the contracts.

Nokia shares were up 3% in afternoon trading.

Orange Belgium and Proximus said Ericsson (BS:ERICAs) would supply the core of their 5G networks, a smaller slice of business.

EU members have been stepping up scrutiny of so-called high-risk vendors. This subjects Huawei's governance and technology to critical examination and is likely to lead other European operators to strip it from their networks, analysts say.

Nokia and Ericsson have been the main beneficiaries of the challenges facing Huawei. From Bell Canada and Telus Corp in Canada to BT in Britain, the Nordic companies have been grabbing market share from the Chinese firm.

© Reuters. The EU flag and a smartphone with the Huawei and 5G network logo are seen on a PC motherboard in this illustration

Separately, Nokia said it had won a contract to provide data management software to Telefonica (MC:TEF) UK, which said the Finnish firm would replace the less than 1% of Huawei kit in its network.

Latest comments

Here's betting that the internal components of all the Nokia and Ericsson switchgear is Made in China
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.