O2D Telefonica Deutschland Holding AG

By Sara Germano 

BERLIN -- Huawei Technologies Inc. secured a commitment to build part of Germany's 5G infrastructure, strengthening its position in Europe's largest economy despite calls from lawmakers to bar the Chinese company.

Telefónica SA, one of three major mobile operators in Germany, said Wednesday it planned to use equipment from Huawei and Finland-based Nokia Corp. to build its 5G network in the country -- subject to Huawei equipment being certified for use.

" Telefónica Germany has clearly taken care not to pre-empt the ongoing political process of defining these security guidelines and at the same time not to delay the start of the 5G rollout," said Klaus Schulze-Löwenberg, a spokesman for the company.

Both Nokia and Huawei will be "equally responsible" for supplying equipment for 5G antenna technology as part of this decision, while Telefónica Germany plans to select vendors for the more sensitive core network sometime next year.

It is the first public commitment toward the use of Huawei equipment for 5G by one of Germany's three main mobile network operators, which also include domestic leader Deutsche Telekom AG and Vodafone Group PLC.

The decision comes amid political quibbling in Germany over whether to allow Huawei to supply components for mobile networks or to ban it, as the U.S. has demanded. The government recently decided against explicitly barring Huawei. Critics of the company are concerned it could be a vehicle for espionage by the Chinese.

But lawmakers from Germany's ruling coalition have pushed back and threatened to amend the nation's telecommunications security laws in a way that would exclude the Chinese vendor. Timing of a parliamentary vote on the updated security regulations is unclear but expected soon.

At the annual convention of Chancellor Angela Merkel's Christian Democratic Union last month, members adopted a nonbinding motion to exclude 5G network bids by foreign equipment makers that could be subject to influence from their governments -- which applies to Huawei.

Deutsche Telekom says it is waiting out the political quarreling before signing any new equipment deals. "In view of the unclear political situation, we are not currently entering into any 5G contracts with any manufacturer. We informed the manufacturers about this last week," a company spokesman said in a statement. "We hope, however, that we will get political clarity for the 5G expansion in Germany as soon as possible, so as not to fall behind."

Huawei has said that it would be willing to sign a no-spy agreement and welcomes regulatory scrutiny both in Germany and elsewhere. The Chinese company is already a major supplier to all three network operators in their existing infrastructure, and a company spokesman said this week that efforts to build out Germany's 4G network are continuing.

Operators in Germany have lobbied against banning Huawei, saying it would push up the cost of building the 5G network and delay its deployment.

Write to Sara Germano at sara.germano@wsj.com

(END) Dow Jones Newswires

December 11, 2019 11:04 ET (16:04 GMT)

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