The merger of Spring and T-Mobile is still going to plan, says Deutsche Telekom (DT), but the prospect of a Huawei ban gives them cause for concern in their dom... View More
The merger of Spring and T-Mobile is still going to plan, says Deutsche Telekom (DT), but the prospect of a Huawei ban gives them cause for concern in their domestic market…Last month, DT signed an agreement with Ericsson for 5G RAN, but the company is nonetheless somewhat reliant on the Huawei, with documents published in June suggesting that a removal of their Huawei kit would cost around €3 billion, a scenario likened to ‘Armageddon’…Meanwhile, he extolled the virtues of open, cloud-based technology – also known as Open RAN – which would help to expand the RAN ecosystem and circumvent the problem of Huawei altogether.
(Total Telecom, August 13 )
Gareth Owen's key takeaways:
The Chinese vendor is supplying around two-thirds of its RAN equipment, with Ericsson responsible for the remaining sites. Most of Deutsche Telekom’s existing 30,000 5G cell sites are believed to be equipped with Huawei equipment, which would need to be replaced if a ban was enforced by the German government. A decision is expected soon.
Despite pressure from the US, an outright ban is thought unlikely, primarily due to the economic ramifications on the German economy, particularly the automotive and chemicals sectors, which depend heavily on exports to China. However, the German government may choose to limit the amount Huawei equipment and/or introduce other measures.
In a bid to minimise government intervention with respect to Huawei, Deutsche Telekom’s CEO is trying to appease the German government by calling for the introduction of statutory open RAN mandates, opening up the RAN market.
An open RAN mandate rather than an outright ban on Huawei could be a politically acceptable solution for the German government as it could potentially exclude, or at the very least, significantly minimise the presence of Chinese vendors in Germany during the next few years.
Of the Big Three incumbents, Huawei is the most opposed to open RAN and potentially has the most to lose, although it has slightly softened its stance recently. In contrast, Nokia and Samsung are the most amenable to the new technology with Ericsson somewhere in the middle.
If the German government does not enforce a complete ban, as expected, the likelihood is that Deutsche Telekom will stick with current vendors Huawei and Ericsson. Yet this is another indication that the trend towards open RAN is gaining strength and is being driven by geopolitical rather than market forces.