The EU has said member states should allow Chinese telecoms giant Huawei to operate within the bloc — but with strict regulations to protect national security. The US has urged allies not to use the technology.
The European Union on Wednesday unveiled security guidelines for "high-risk" suppliers in the opening up of fifth-generation, or 5G, telecoms network across the bloc.
The European Commission did not mention Huawei by name, and it did not recommend a ban on any company in shaping future networks. However, it said strict rules should be applied where certain suppliers were concerned.
Recommendations include blocking high-risk equipment suppliers from "critical and sensitive" parts of the network, including the core, which keeps track of data and authenticates smartphones on the network.
There was already an expectation that the European Commission would recommend a tightly-regulated role for networks such as Huawei in developing the EU's 5G network.
US cybersecurity fears
The US has said it believes the company is a potential threat to cybersecurity — and it fears that the firm could be used to conduct cyber espionage on the part of the Chinese government. It is lobbying allies, including those in Europe, not to use Huawei.
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The US stance is unlikely to change, as US Secretary of State Mike Pompeo on Wednesday weighed in on the UK's to decision to also not ban Huawei, saying: "We'll make sure American information passes across a network we are confident that that network is a trusted one."
However, the company provides a relatively inexpensive option for super-fast data transfers behind technologies, such as self-driving cars and remotely operated factory robots.
The operators Deutsche Telekom, Vodafone, and Telefonica are all Huawei clients — and they warn that replacing equipment could cost billions of euros. Huawei leads the global telecoms equipment industry, having a 28% share of the market share worldwide. Nokia is second at 16%, and Ericsson third at 13%.
Decision for each member state
In Germany, Chancellor Angela Merkel — who favors a level playing field for all providers — has faced resistance from within her own party from lawmakers who back US calls for Huawei to be banned outright.
Any ban on Huawei would ultimately be left for individual member states to impose, but the commission's compromise recommendation provides cover for European capitals to resist Washington's demands.