Europe Mulls Phased Removal of Huawei and ZTE Equipment from Telecom Infrastructure

The European Union (EU) is considering more concrete steps to phase out equipment from Chinese technology firms Huawei and ZTE in an effort to bolster cybersecurity across the continent. According to Bloomberg’s report, citing sources close to the matter, the EU Commission aims to convert its earlier advice on limiting the use of high-risk suppliers’ equipment into binding legal regulations.

The initiative is spearheaded by European Commission Vice-President Henna Virkkunen, who emphasizes reducing security vulnerabilities in 5G and next-generation networks. Additionally, she is pushing for restrictions on Chinese providers’ roles in fiber internet projects. If this regulation comes to fruition, EU member states will be obligated to adhere to the commission’s security guidelines or face enforcement mechanisms and financial penalties.

Since the Commission’s advice in 2020 was widely considered but had variable implementations across countries, there is a push now for legal compulsion to ensure uniformity. The proposed regulation aims to prevent Chinese companies from participating as equipment suppliers during the accelerated roll-out of broadband internet infrastructure.

Background Context

In 2020, the EU Commission advised member states on restricting high-risk suppliers’ equipment usage due to cybersecurity concerns. Although several countries have taken this advice into account, inconsistencies remain in its application. This new initiative seeks to enforce stricter guidelines across all member states.

Implications for Huawei and ZTE

The proposed regulation will significantly impact Chinese tech giants like Huawei and ZTE. Both companies are major players in telecommunications equipment but have faced increasing scrutiny over security concerns, particularly around their involvement in 5G infrastructure.

Huawei and ZTE have not responded to Bloomberg’s inquiries regarding this development. Their silence might indicate strategic planning or internal deliberations on how best to navigate these potential regulatory changes.

Future Outlook

The proposal, if adopted, will create a more uniform approach towards Chinese equipment in European telecommunications networks. It is part of an ongoing effort by the EU and other global entities to manage China’s influence over critical infrastructure.

As cybersecurity becomes increasingly important amid rapid technological advancements, such measures may become more commonplace globally. The impact on Huawei and ZTE’s market share in Europe could be significant if they are forced out or restricted severely.