Nordic governments open to Huawei’s ‘no spy’ offer

Huawei has responded to a series of 5G contract setbacks in the Nordic region by offering governments an “anti-industrial espionage” commitment that would be incorporated into all contracts with the Chinese company.

Although no Nordic state has moved to exclude Huawei from participating in 5G projects, national intelligence agencies in the region’s countries continue to advise telcos on the potential risks to network security posed by partnering with Huawei.  

The maintenance of strong integrity in network systems has emerged as a high priority for Nordic telcos currently engaged in plans to advance and roll out national 5G projects.

The elevation of Huawei as a potential security threat to next-generation communications networks accelerated after US government moves to block the company from 5G contracts. The US advised European countries to follow its lead.

Nordic governments adopted a wait-and-see approach, encouraging greater interaction between telecoms and national security services to assess risk ahead of the awarding of 5G contracts. Confidence in Huawei dipped as Nordic governments began to openly debate whether to block the company from taking part in 5G deliveries.

In March, Huawei suffered its first notable 5G setback in Scandinavia when TDC chose Ericsson as its 5G partner in Denmark. The decision came as some surprise given that TDC had begun to develop a robust 5G partnership with Huawei in 2017-2018, and the Chinese company had been expected to become TDC’s lead partner to roll out 5G in Denmark.

Huawei again lost out to Ericsson when Telia selected the Swedish company as its sole 5G partner and radio access network supplier in the roll-out of Telia’s next-generation network in Norway by 2023.

For each of these 5G contracts, TDC and Telia had both conducted extensive consultations with Danish, Swedish and Norwegian national security agencies and experts before finalising the agreements. 

TDC and Telia contend that their final decisions on 5G partner and supplier agreements were taken from a purely business perspective, and on the basis of the technology, quality and price of offers presented by the two principal bidders, Ericsson and Huawei.

However, the fact that both telecoms groups held lengthy consultations with national defence and homeland security agencies underlines the deep concern felt by company chiefs in the decision-making process. The main concern related to the possible risks posed by Huawei’s widely reported close relationship with the Chinese government and the country’s national intelligence infrastructure.  

“What we had were two bids from Ericsson and Huawei and a tough negotiating process,” said Allison Kirkby, CEO of TDC. “We did consult with security services. This is a continuous dialogue because we are running critical infrastructure.”

Huawei continues to face an uphill battle in Europe and the US in relation to allegations over its ties with the Chinese government and intelligence community, and Nordic state intelligence agencies continue to consider the supplier a potential industrial espionage risk to their national security, especially in the 5G domain.

Assessments conducted by state intelligence agencies in Denmark and Norway in 2018 and 2019 concluded that as long as Huawei retains its collaborative relationship with the Chinese government, it will continue to be regarded as a risk to the security of national communications networks.

Norway’s national security agency, PTS, has warned the country’s telcos that using equipment from Huawei poses a particular risk, potentially leaving networks vulnerable to the harvesting of data from clients through backdoor access on behalf of the Chinese government. Such claims are emphatically denied by Huawei.

Jiang Lichao, Huawei’s country manager in Denmark, described the company’s so-called “anti-spying” commitment as a serious effort to build “trust and certainty” with governments and the telecoms sector across Scandinavia.

“We are ready to enter a dialogue with politicians in Denmark and the wider Scandinavian region who are concerned about the company and security,” said Lichao. “To this end, we are willing to sign anti-espionage agreements if this can provide a solution that addresses the concerns that politicians have about Huawei.”

The anti-espionage agreements offered by Huawei would commit the company to “never install backdoors in its products”, said Lichao. The company is also prepared to collaborate with Nordic governments to define and implement security standards that make it impossible to install backdoors and “spy” on 5G and other critical communications networks, he added.

“The type of agreement we are proposing would mean that should Huawei feel at any time that it is under pressure to facilitate spying by the Chinese state, we would be contractually required to inform governments of this event,” said Lichao. “The agreement would allow, in such circumstances, for the voiding of all contracts entered into. If politicians have other demands to include in such agreements, we are ready to meet and discuss them.”

Huawei’s offer to Danish and other Nordic governments is seen as a template for comparable discussions and potential agreements with authorities across Europe, especially in the key markets of Germany, the UK, France and Italy.