Deutsche Telekom reviews the suppliers in the light of China security debate

FILE PHOTO: The logo of German telecommunications giant Deutsche Telekom AG is seen at the company’s headquarters in Bonn February 25, 2016. REUTERS/Wolfgang rattay

FRANKFURT (Reuters) – Deutsche Telekom, Europe’s largest telecommunications company, said on Friday it was reviewing its network vendor strategy in the light of a discussion about the safety of the Chinese equipment in the network that it is taking “very seriously”.

The reassessment by Telekom, which the German state has a stake of almost a third, comes after a number of U.S. allies excluded Chinese equipment maker Huawei on national security grounds.

“Deutsche Telekom is taking the global discussion about the safety of the equipment in the network of the Chinese suppliers very seriously,” the company said in a response to a Reuters query.

Telekom already carries a multi-vendor strategy, rely primarily on the equipment of Ericsson, Nokia, Cisco and Huawei. “Nevertheless, we are revising our procurement strategy,” Telekom said.

The shift is of interest, because, so far, German officials have said that they have no legal basis to exclude any vendors from the buildout of the fifth-generation networks in response to warnings from Washington that Huawei networks were not secure.

AMERICAN officials have informed allies in the last few months that Huawei is ultimately up to the suggestions of the Chinese state, while also warning that the network equipment could contain “back doors that open to cyber espionage. Huawei denies this.

Telekom, for its part, has a close relationship with Huawei, which is the world leader in network acceleration and number two in smartphones. The two are conducting a pilot project in Berlin before the auction of German 5G licences by 2019.

Almost half of the German company, the revenue, however, comes from its profitable and fast-growing U.S. unit T-Mobile, which is undergoing regulatory scrutiny of the $26 billion bid to take over Sprint Corp.

Reporting by Douglas Busvine; editing by Thomas Seythal and Gopakumar Warrier

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