EU Considers Phasing Out Huawei and ZTE

Commission weighs unified rules for telecom security

The European Commission is examining measures that could require member states to gradually exclude Huawei and ZTE from mobile networks. Officials say the goal is to reduce reliance on suppliers considered security risks, particularly in critical infrastructure. Concerns have grown that unchecked foreign access to telecom equipment could expose sensitive data. Bloomberg News reported that the Commission is exploring how to make such restrictions mandatory across the EU.

Security Risks and Political Sensitivities

EU officials argue that Chinese companies’ involvement in 5G networks increases risks of espionage and data breaches. Countries such as Germany and France have already introduced national restrictions, but a coordinated EU-wide approach has been lacking. The Commission is now considering binding rules to ensure all member states follow the same security principles. China has repeatedly objected to such measures, calling them discriminatory, while Huawei insists its equipment meets international standards and denies links to government intelligence.

The issue is politically sensitive, as it touches on trade relations and technological sovereignty. EU representatives stress that the initiative is not directed against any single country but aims to strengthen network security. Huawei has maintained that its products are safe and compliant with global regulations. Despite these assurances, skepticism remains among European policymakers.

Divisions Among Member States

Approaches to Huawei and ZTE vary widely across the EU. Sweden and Denmark excluded the companies from their 5G networks years ago, while Hungary and Spain continue to cooperate with them. Economic considerations play a role, as Huawei’s equipment is often cheaper and widely used in network expansion. These differences have created uneven security standards across the bloc.

The Commission’s proposal seeks to harmonize rules and reduce disparities. A common directive would prevent member states from competing for supplier contracts at the expense of security. Unified action could also strengthen Europe’s position in global technology markets. The move reflects growing recognition that fragmented policies leave vulnerabilities in shared infrastructure.

Global Context and Market Impact

The United States banned Huawei and ZTE from its networks years ago and has urged allies to follow suit. Washington argues that the companies pose national security risks, a view increasingly echoed in Europe. Russia’s war in Ukraine and energy dependency concerns have reinforced the EU’s focus on resilience and independence. If the Commission’s plan is adopted, it could reshape the European telecom market significantly.

Providers would need to seek alternative suppliers, raising short-term costs for network development. In the longer term, the shift could boost European firms such as Ericsson and Nokia, already major players in the 5G sector. Huawei, which held over 40% of the global 5G equipment market in 2023, relies heavily on Asian and African sales. An EU ban would therefore be more strategic than financial, signaling Europe’s intent to prioritize security over cost.