EU Commission Urges Countries To Diversify 5G Suppliers On An Urgent Basis

The European Commission has urged all the countries in the European Union to undertake urgent action to diversify the pool of suppliers for their 5G networks.

According to analysts, this move is aimed at increasing competition for the Chinese telecom equipment maker Huawei and to reduce the firm’s presence in Europe amid pressure on the EU from the United States to ban the Chinese company from 5G networks just as the United Kingdom has done recently.

With the aim of reducing reduce cybersecurity risks to next-generation mobile networks, a tough line on 5G suppliers had been taken by the European Union in November last year. It is touted that the 5G networks are the key to spur economic growth and competitiveness.

Reducing the dependency of countries and telecoms operators on just one supplier of 5G equipment was the main stay of the strategy.

Huawei is the largest telecoms equipment maker of the world and is primarily rivaled by Finland’s Nokia and Sweden’s Ericsson.

The Commission said that while some progress has been made, a lot more remains to be done.

“Progress is urgently needed to mitigate the risk of dependency on high-risk suppliers, also with a view to reducing dependencies at (European) Union level,” the EU executive said, reporting on the progress made by the 27 EU countries.

“Challenges have been identified in designing and imposing appropriate multi-vendor strategies for individual MNOs (mobile network operator) or at national level due to technical or operational difficulties,” it said, citing the lack of interoperability or the size of the country as some of the problems.

According to reports published last week, a de facto ban on Huawei is also being taken by France in addition to the UK.

The United States is concerned that the telecom equipment supplied by the Shenzen based company could be used by Chinese agencies to spy on Western countries.

All such allegations have been denied by Huawei.

The roll out of 5G across the bloc will not be derailed by the additional costs being projected to accompany phasing out high-risk suppliers. EU officials said. They said that Ericsson and Nokia will be able to meet the demand for 5G roll outs.

“If you look at the situation worldwide, Nokia and Ericsson have a large part of the world market in terms of contracts signed worldwide on deployment of 5G. The two combined have certainly more than 50% to 60%, 65%. I think that two European suppliers can provide what is needed not only for Europe but also for a large part of the world,” one of the officials was quote din the media as saying.

The foreign direct investments screening mechanism was urged to be adopted without by the Commission to 13 EU countries. According to the Commission, this is a tool that allows governments of EU member states to intervene in cases of foreign direct investment being made in strategic assets – particularly so if the investment involves any state-controlled or state-financed enterprises, including from China.

(Adapted from Reuters.com)



Categories: Creativity, Economy & Finance, Geopolitics, Regulations & Legal, Strategy, Sustainability, Uncategorized

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